Ken, $65,$ was injured while skiing in late $2021-$ and could no longer work. As a

result, he is paid certain amounts, all of which relate to this injury$-$ he gets a $$40,000$

annual disability pay from a disability insurance policy that his company had

purchased, for all employees! Nice benefit! Payments started in January $2022.$

In addition, Ken$$s employer paid $$10,000$ annually in premiums $$ for life! $-$ to

provide health insurance coverage to Ken $($did this for all retired employees $$

another nice benefit!$).$ What a deal.

Ken sued back in $2021$ the year he got hurt. His hospital costs were HIGH $-$

$$400,000$ that year. He paid directly a part of this $-$ $$200,000$ because there was

some issue with his employer provided medical insurance coverage $($later resolved$).$

Anyway, he took a Schedule A tax deduction for the $$200,000$ since it exceeded

$10\%$ of his AGI of $100,000$ for $2021,$ he claimed $$190,000$ on his Schedule A and

itemized his deductions for $2021!$ Once fixed $$ he did get that $$200,000$ back from

his insurance company, but not until January $2023!$ And the insurance company

paid the balance of $$200,000$ for Ken, BUT paid DIRECTLY to the hospital! WHAT A

NICE PIECE OF COMPENSATION TO HAVE!

His lawsuit got settled FINALLY in $2023$ he got $$80,000$ received for damages for

the personal injuries he suffered $($two broken legs$).$ AND $$20,000$ for the emotional

damages he suffered, AND another $$200,000$ for punitive damages! Dang Ski Resort

was clearly negligent in how they operated that ski lift! THEY BETTER FIX IT$!$

Anyway, this settlement was be paid to him on $04/15/2023.$ TAX DAY! Ken invested

this entire $$300,000$ he received $$ he bought shares of a company that manufactures

ski lifts! The company is based in Germany $$ High Precision Ski Lifts, GmbH$.$ This is

the ONLY stock he owns!

Later in $2023$ his lawyer reminds Ken that Ken owes him for his services. Ken and

he had cut a deal so that Ken would pay him hourly, rather than on a contingent fee

basis. $100$ hours at $$500$ per hour $=$ $$50,000$ bill. Ken paid the bill on $12/25/2023.$

Ken tells you that during $2023$ he received $$400$ in US Treasury bond interest; $$100$

in interest from a bond issued by the state of Delaware; $$500$ in interest on a

corporate bond issued by Apple Inc; $$400$ in interest income on a State of Maryland

issued bond, and he received $$500$ for opening up a new savings account at CAP

ONE Bank $$ he deposited $$10,000.$

You ask $$ in a package that you gave him, called a $$tax organizer$$ all sorts of

questions. You even mention $$is there any other income, etc you missed $$ please

be careful and answer completely!$$

So$,$ Ken, still bummed by the accident of course, digs deeper into his $$affairs$$ and

finds that he received the following other things during $2023$

Federal income tax refund $$26,000$

City of Philadelphia bond interest $$800$

US Treasury Bond interest $$400$

Dividend from common stock he owned in the German Company $$300$

State of Florida bond interest $$700$

Boeing Corporation bond interest $$600$

Form $1099$ shows interest income on CAP ONE savings account $-$ $$450$

He also $$helps out$$ his daughter by giving her $$200$ monthly to help cover her bills.

That$$s $$2,400$ in total for $2023.$ And $$ he pays $$500$ monthly in child support for the

$4$ year old child he illegitimately fathered $$ that$$s $$6,000$ a year! He makes these

payments on the $15$th of each month!