Jack received a court award in a civil libel and slander suit against National Gossip.He received $120,000 for damages to his professional reputation, $100,000 for damages to his personal reputation, and $50,000 in punitive damages.Jack must include in his gross income as a damage award:

Question

Quizplus · Accepted Answer

According to the IRS, damages received for defamation (libel and slander) are taxable as ordinary income. Therefore, Jack must include the entire amount awarded - $120,000 + $100,000 + $50,000 = $270,000 in his gross income. Choice D is the correct answer.

Jack Received a Court Award in a Civil Libel and Slander