Derrick Was in an Automobile Accident While He Was Going

question 30

Multiple Choice

Derrick was in an automobile accident while he was going to work.The doctor advised him to stay home for eight months due to his physical injuries.The resulting lawsuit was settled and Derrick received the following amounts: $$\begin{array} { | l | r | } \hline \text { Compensatory damages for physical injury } & \$ 80,000 \\\hline \text { Punitive damages } & 95,000 \\\hline\end{array}$$ How much of the settlement must Derrick include in ordinary income on his tax return?

• A)$0
• B)$80,000
• C)$95,000
• D)$175,000

---

Definitions:

Alcohol Addiction

A chronic disease characterized by uncontrolled drinking and a preoccupation with alcohol.

Genetic

Pertaining to genes and heredity, influencing the development and functioning of organisms and their transmission of traits to offspring.

Learned

Acquired knowledge or skills through experience, study, or being taught, which can influence behavior and cognition.

Incentive Salience

The attribute of a stimulus that makes it stand out as particularly attractive or desirable, often influencing motivation and behavior.