33. Pam recently sued the manufacturer for her medical bills ($6,000), her emoti

Question

33. Pam recently sued the manufacturer for her medical bills ($6,000), her emotional stress (3,700), and punitive damages ($44,000). What amount must Pam include in her gross income? was sickened by drinking metal shavings in her Dr. Pepper. She succesfully a. $44,000 b. $50,000 c. $47,700 d. $9,700 e. Zero-None of these benefits is included in gross income 34. Leroy's employer has offered him the following employment package at Providence Hospital. What is Leroy's gross income from his employment? Salary $350,000 Housing Allowance to live close to hospita$25,000 Dental insurance $2,000 $10,000 $7,000 Membership to EP Fitness.. Tuition reimbursement for cont $3,000 inuing education.53 Income:S

Explanation / Answer

33. a. $ 44,000 will be included in Pam's gross income. Medical bills is the actual cost of the medicine, hence they cannot be added to gross income. Also, claim for emotional stress do not form part of gross income on the ground that emotional stress are treated as damages received for physical injury or sickness. Punitive damages received are taxable and should be reported as other income even if these damages are received in a settlement for physical injuries or sickness.

34. Language not clear.

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