Four years ago, Lyle Mercer was injured in a railroad accident and sued the railroad for damages. The jury required the railroad to pay $545,000 compensation for his physical injuries, $157,000 for lost wages during his long recuperation, and $1,687,500 punitive damages. Assume the taxable year is 2022.

Required:

How much of the $2,389,500 settlement is included in Lyles gross income?