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

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Definitions:

Dilated

Refers to the widening or expansion of an opening, vessel, or organ beyond its normal size, often in response to some form of stimulus.

Pupil

The adjustable opening in the center of the eye through which light enters, changing size to regulate the amount of light reaching the retina.

Cornea

The transparent front part of the eye that covers the iris, pupil, and anterior chamber, contributing most of the eye's focusing power.

Transparent Structure

A system or organization in which the operational processes, decisions, and principles are made clear and accessible to its members or the public.