Tony is a high school teacher whose annual income from teaching is $40,000. He has always enjoyed bowling, and his local pro urged him to turn professional. He subsequently begins working for the pro as and unpaid assistant and enters an apprenticeship program with the Professional Bowlers' Association of America (PBA). As an apprentice, he accumulates credits toward becoming a member of the PBA by taking approved classes, working as an assistant pro, and competing in pro tournaments. Tony expects to be approved as a full member of the PBA next year.
Although Tony continues to teach full-time, he goes to the bowling alley each day after school and practices after fulfilling his duties as an unpaid assistant. During the summer, he spends 12 to 15 hours each day at the bowling alley. In addition he participates in as many PBA tournaments as he can work into his schedule.
Tony has come to you for advice on the deductibility of the expenses he has incurred in his bowling career. Since deciding to turn pro, he has won money in tournaments each year. However his expenses have exceeded hi earnings by $5,000 to $10,000 per year.
Required: Tax research memorandum with a minimum of three primary sources