Early in the year, Marion was in an automobile accident during the course of his employment. As a result of the physical injuries he sustained, he received the following payments during the year:
Reimbursement of medical expenses Marion paid by a medical insurance
Policy he purchased $10,000
Damage settlement to replace his lost salary 15,000
What is the amount that Marion must include in gross income for the current year?

Question

Quizplus · Accepted Answer

The reimbursement of medical expenses is not taxable because it is a reimbursement of expenses that Marion already paid. The damage settlement is not taxable because it is a payment for lost salary, which is not considered income.

Early in the Year, Marion Was in an Automobile Accident