2) Indicate how the income and expenses for the activity below are includible in taxable income: (1)if a hobby; (2)if a business. Your answer must include your calculation, a brief explanation of any applicable rules and notes regarding where income and expenses are reported (which schedules). Income : $23,000 Mortgage interest: $6,000 Property taxes: $6,000 Depreciation $4,000 Supplies and fees : $7,000 Telephone: $3,000 Solution (1)if a hobby; (2)if a business. Income : $23,000 Taxable Taxable Mortgage interest: $6,000 Not Deductable Deductable Property taxes: $6,000 Not Deductable Not Deductable Depreciation $4,000 Not Deductable Deductable Supplies and fees : $7,000 Not Deductable Deductable Telephone: $3,000 Not Deductable Deductable .