Chapter 5, Problem 35P

Suresh is a technician working with Melissa’s car repair centre. Due to a dangerous workplace accident, Suresh became seriously ill. Suresh received compensation of $131,000. The lump sum was divided into $57,000 loss of earnings, $43,000 loss of future earning capacity and $31,000 for pain and suffering. Based on legal provisions and case law, advise Suresh, will any of these amounts be assessable income? Furthermore, advise Suresh whether it would be better to accept a lesser

Leigh sued an overzealous bill collector and received the following settlement: Damage to her automobile that the collector attempted to repossess $3,300 Physical damage to her arm caused by the collector $15,000 Loss of income while her arm was healing $6,000 Punitive damages $80,000 Question Content Area a.  Regarding Leigh's settlement, classify the following as either "Included in" or "Excluded from" her gross income.     Included in/Excluded fromIncome • Damage to her automobile that the collector attempted to repossess   • Physical damage to her arm caused by the collector   • Loss of income while her arm was healing   • Punitive damages     Question Content Area b.  Assume that Leigh also collected $25,000 of damages for slander to her personal reputation caused by the bill collector misrepresenting the facts to Leigh's employer and other creditors. Is this $25,000 included in Leigh's gross income?

Jane sued her employer for age discrimination. She was awarded $5,000 to cover the medical bills she incurred because of related emotional distress, $20,000 to punish the employer for discrimination, and $10,000 to compensate her for lost wages. How much does Jane include in her taxable income?