Determine the amount of income Alex must report

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Problem - Alex, who is single, conducts an activity in 2019 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

Required - 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.

Reference no: EM132656904

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