1. Jamari Peters (Social Security number 123-45-6789) conducts a business with the following results in 2018:

Revenue	$20,000
Depreciation on car	3,960
Operating expenses of car	3,100
Rent	6,000
Wages	8,200
Amortization of intangibles	680

Jamari estimates that due to a depressed real estate market, the value of land owned by the business declined by $5,200.

1. Calculate the effect of Jamaris business on his AGI.
2. How would your answer in part (a) change if the activity was a hobby?

1. Alex, who is single, conducts an activity in 2018 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, Alexs AGI is $42,000. Determine the amount of income Alex must report and the amount of the expenses he is permitted to deduct.