Pierre makes birdhouses in his spare time. He earned $4,800 selling the birdhouses during the year and incurred expenses as follows:

Supplies Depreciation on tools Booth rental at craft fairs Vendor registration fee for art festival Total $3,500 975 300 100 $4,875 His AGI, without considering the effect of the sales of the birdhouses, is $31,000 and his personal exemption is 4,050 Calculate the following if the activity is: A hobby: AGI Deductible expenses A business: AGI Deductible expenses