Theresa Sued Her Former Employer for Age, Race, and Gender

Theresa sued her former employer for age, race, and gender discrimination.She claimed $200,000 in damages for loss of income, $300,000 for emotional harm, and $500,000 in punitive damages.She settled the claim for $700,000.As a result of the settlement, Theresa must include in gross income:

A) $700,000.
B) $500,000.
C) $490,000 [($700,000/$1,000,000) × $700,000].
D) $0.
E) None of these.