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
$\begin{array} { lr }
\text { insurance policy he purchased } &\$ 10,000 \
\text { Damage settlement to replace his lost salary } &15,000
\end{array}$
What is the amount that Marion must include in gross income for the current year?

Question

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 
$\begin{array} { lr } 
\text { insurance policy he purchased } &\$ 10,000 \
\text { Damage settlement to replace his lost salary } &15,000
\end{array}$
 What is the amount that Marion must include in gross income for the current year?

Quizplus · Accepted Answer

The medical expenses reimbursement 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