Alex, who is single, conducts an activity in 2018 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.