A Flood Forced a to Live in a Hotel for Two

question 81

Multiple Choice

A flood forced A to live in a hotel for two months before she could return home.On average, it cost A $600 per month to live in her home.A's insurer paid out to A a total of $3,600: $1,800 for each of the two months to cover temporary living costs.A paid a corresponding $3,000 hotel bill.Of the $3,600 paid by the insurance company, how much, if any, is taxable to A?

• A)$1,800
• B)$3,600, reduced by the statutory multiplier
• C)$600
• D)$0
• E)$2,400

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Definitions:

Complementary Medicine

A group of diverse medical and health care systems, practices, and products that are not currently considered part of conventional medicine and are used in addition to conventional techniques.

Analgesic Drugs

Drugs that decrease the perception of pain.

Massage

A therapeutic technique involving the manipulation of the body's muscles and tissues to relieve stress, pain, and tension.

Alternative Medical Systems

Health care practices and products not traditionally recognized by mainstream medicine, such as acupuncture and homeopathy.