Alex, who is single, conducts an activity in 2015 that is appropriately classified as a hobby. The activity produces the following revenues and expenses:

Revenue ...................................... $18,000

Property taxes ................................3,000

Materials and supplies ......................4,500

Utilities .......................................2,000

Advertising ...................................5,000

Insurance ..................................... 750

Depreciation ..................................4,000

Without regard to this activity, Alex's AGI is $42,000. Determine the amount of income Alex must report, the amount of the expenses he is permitted to deduct, and his taxable income.