Pam Recently Was Sickened by Eating Spoiled Peanut Butter

question 32

Multiple Choice

Pam recently was sickened by eating spoiled peanut butter. She successfully sued the manufacturer for her medical bills ($3,700) , her emotional distress ($6,000-she now fears peanut butter) , and punitive damages ($44,000) . What amount must Pam include in her gross income?

• A)$44,000
• B)$50,000
• C)$47,700
• D)$9,700
• E)$0-none of these benefits are included in gross income.

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Definitions:

Completely Performed

Refers to a contractual obligation that has been fully executed or carried out by all parties involved to the terms agreed upon.

Oral Contract

An agreement made through spoken words rather than written documentation, which can be legally binding in some cases.

Statute of Frauds

The Statute of Frauds is a legal doctrine that requires certain types of contracts to be in writing and signed by the parties involved to be enforceable.

Oral Evidence

Testimony given by a witness in court or during a legal proceeding that is spoken and not written.