Priscella pursued a hobby of making bedspreads in her spare time. She uses a home office to conduct her hobby which comprises 10% of the square footage of her house. Her AGI before considering the hobby is $55,000. During the year she sold the bedspreads for $11,000. She incurred the following expenses: Hobby supplies Total real estate taxes on the house Advertising Total mortgage interest on the house $5,500 6,000 4,000 8,000 House depreciation just relating to the hobby space 2,000 Assuming that the activity is deemed a hobby, how should she report these items on her tax return? O Include $11,000 in income and deduct all hobby related expenses of $12,900 above the line. O Ignore both income and expenses since hobby losses are disallowed O Include $11,000 in income and deduct supplies and advertising expenses of $9,500 above the line. O Include $11,000 in income, deduct none of the hobby expenses above the line, and deduct $14,000 (real estate taxes and mortgage interest) on Schedule A. O Include $11,000 as income above the line, deduct none of the hobby expenses above the line, but deduct $11,000 of real estate taxes and mortgage interest on Schedule A