Question

Christie sued her former employer for a back injury she suffered on the job in 2014. As a result of the injury, she was partially disabled. In 2015, she received $240,000 for her loss of future income, $160,000 in punitive damages because of the employer's flagrant disregard for the employee's safety, and $15,000 for medical expenses. The medical expenses were deducted on her 2014 return, reducing her taxable income by $12,000. Christie's 2015gross income from the above is:

a. $415,000.
b. $412,000.
c. $255,000.
d. $175,000.
e. $172,000.

Answer 1

Christie's gross income for 2015 is the sum of the amounts she received, which includes compensation, punitive damages, and medical expenses. Christie's gross income for 2015 is $415,000. Therefore, the correct answer is a. $415,000.

Step-by-step explanation:

Christie's gross income for 2015 is the sum of the amounts she received, which includes compensation, punitive damages, and medical expenses.

Gross income = Loss of future income + Punitive damages + Medical expenses

= $240,000 + $160,000 + $15,000

= $415,000

Therefore, the correct answer is:

a. $415,000.