In 2012, Theresa was in an automobile accident and suffered physical injuries.The accident was caused by Ramon's negligence.In 2013, Theresa collected from his insurance company.She received $15,000 for loss of income, $25,000 punitive damages, and $8,000 for medical expenses which she had deducted on her 2012 tax return (the amount in excess of 7.5% of adjusted gross income).As a result of the above, Theresa's 2013 gross income is increased by $33,000.

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Theresa received a total of $48,000 ($15,000 + $25,000 + $8,000) from Ramon's insurance company in 2013, which is included in her gross income for that year.

In 2012, Theresa Was in an Automobile Accident and Suffered