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: Deductible expenses: