Amanda and Earl are married and live in Texas. Amanda and Earl have a pre-marital agreement that provides that all income on separate property will be treated as separate property. Amandas parents are very wealthy and have given her significant amounts of money. Amanda deposits those funds into a non-interest-bearing checking account in her name only. In addition, Amanda owns a rental home that her parents gave to her. Earl comes from a poor family and has worked very hard to get where he is today. He has a great job and makes a comfortable living.

In 2020, Earl and Amanda had the following transactions:

1. Amandas rental home earned $20,000 in rental income.
2. Amandas parents gave her an additional $150,000 as a gift.
3. Earl earned $120,000 in salary.
4. Earl was injured in a bad accident at work. He received $40,000 to pay his medical expenses, $50,000 for pain and suffering related to his injuries, and $25,000 from a long-term disability insurance policy that he purchased and paid for. He was also awarded $500,000 in punitive damages.
5. They sold their principal residence for $850,000. They had purchased their home five years ago using money they earned during marriage for $400,000.

Amanda and Earl file separate income tax returns. Please determine how much income Amanda and Earl will each report on their respective returns. Be sure to fully explain your analysis.