Question
Fernando was involved in a car accident in 2022. Fernando suffered physical injuries that kept him out of work for several weeks. In addition, Fernando's
Fernando was involved in a car accident in 2022. Fernando suffered physical injuries that kept him out of work for several weeks. In addition, Fernando's car suffered cosmetic damage, although Fernando did not repair the damage. The other driver was found to have intentionally ran a red light in order to hit Fernando, and, Fernando recovered the following amounts in 2022: !"$10,000 for damage to the car !"$10,000 compensatory damages for lost wages/loss of income while Fernando recovered from his injuries !"$16,000 compensatory damages for pain and suffering !"$1,000,000 punitive damages Fernando purchased the car 10 years ago for $8,000. What amount of the damages does Fernando include in gross income? In addition to the car accident, in 2022, Fernando sued a customer for breach of contract. Fernando recovered loss profits of $100,000. What amount of the lost profits does Fernando include in gross income?
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