Christie sued her former employer for a back injury she suffered on the job in 2014.As a result of the injury,she was partially disabled.In 2015,she received $240,000 for her loss of future income,$160,000 in punitive damages because of the employer's flagrant disregard for the employee's safety,and $15,000 for medical expenses.The medical expenses were deducted on her 2014 return,reducing her taxable income by $12,000.Christie's 2015gross income from the above is:

Question

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Christie must include in gross income the $160,000 of punitive damages received and the $12,000 for the previously deducted medical expenses.The medical expense recovery is included in gross income under the tax benefit rule.

Christie Sued Her Former Employer for a Back Injury She