Problem 6-45 (LO. 3)

Alex, who is single, conducts an activity in 2020 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 and the amount of the expenses he is permitted to deduct. Assume Alex itemizes his deductions.

Reportable income: $ 18,000

Deductible expenses: $ ???