Alex, who is single, conducts an activity in 2017 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, the amount of the expenses he is permitted to deduct, and
his taxable income.