Question

In 2020, Theresa was in an automobile accident and suffered physical injuries. The accident was caused by Ramon's negligence. In 2021, Theresa collected from his insurance company. She received $15,000 for loss of income, $10,000 for pain and suffering, $50,000 for punitive damages, and $6,000 for medical expenses that she had deducted on her 2020 tax return (the amount in excess of 7.5% of adjusted gross income). As a result of this, Theresa's 2021 gross income is increased by ___________

Answer 1

$56,000

Step-by-step explanation:

Calculation for how much is Theresa's 2021 gross income is increased by

Using this formula

2021 gross income =Punitive damages+Medical expenses

Let plug in the formula

2021 gross income=$50,000 + $6,000

2021 gross income=$56,000

Therefore As a result of this, Theresa's 2021 gross income is increased by $56,000