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

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?

Quizplus · Accepted Answer

The reimbursement of medical expenses is not taxable because it is a reimbursement of expenses that were already deducted on a prior tax return. The damage settlement is not taxable because it is a payment for lost wages, which are not taxable.

Early in the Year,Marion Was in an Automobile Accident During