Elisa sued her former employer for discrimination. She was awarded $200,000 for lost wages, $30,000 for medical expenses related to emotional distress resulting from the discrimination, and $300,000 in punitive damages. The amount taxable is

Question

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The $200,000 for lost wages and $300,000 in punitive damages are taxable. The $30,000 for medical expenses is not taxable if it is directly related to emotional distress.

Elisa Sued Her Former Employer for Discrimination