Problem 11-37 (LO. 7)

Alex, who is single, conducts an activity in 2019 that is 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 hobby, Alex's AGI is $42,000.

Determine the amount of gross income that Alex must report and the amount of expenses he is permitted to deduct. Assume Alex itemizes his deductions.

Reportable income: $ Deductible expenses: $