Butter), and Punitive Damages ($44,000)

question 118

Multiple Choice

butter) , and punitive damages ($44,000) . What amount must Pam include in her gross income?

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

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Definitions:

Levy

The obtaining of money by legal process through the seizure and sale of property, usually done after a writ of execution has been issued.

Buyer in Ordinary Course

A person who purchases goods in good faith from a seller who is in the business of selling such goods, without aware of any claims against the goods.

Trustee in Bankruptcy

An appointed individual responsible for managing the estate of a bankrupt person, to distribute the assets among creditors.

Subsequent Lien Creditor

A creditor who obtains a lien on a debtor's property after other liens have already been placed on the property, typically having lower priority in case of asset distribution.