Alex, who is single, conducts an activity this year that is classified as a hobby. The activity

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Alex, who is single, conducts an activity this year that is 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 gross income that Alex must report, the amount of the expenses he is permitted to deduct, and his taxable income from the hobby.
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South Western Federal Taxation 2018 Essentials Of Taxation Individuals And Business Entities

ISBN: 9781337386173

21st Edition

Authors: William A. Raabe, James C. Young, Annette Nellen, David M. Maloney

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