While walking the family dogs in late July, Gunnar was struck by a delivery van and seriously injured. After being hospitalized for a week, he returned home, bruised and sore, but with no permanent injuries. The driver of the van was arrested and ticketed by the police for reckless operation of a vehicle and was later prosecuted for drug use. To prevent adverse publicity related to a lawsuit, the owner of the delivery service paid for Gunnar$$s medical expenses and sent him a check on August $16,2022,$ for $$90,000.$ The check was accompanied by a letter that stated: $$This $$90,000$ is a settlement for physical injuries sustained by Gunnar Ferguson.$$ Gunnar was represented in the negotiations with the delivery company by his brother, a practicing attorney. He did not charge the Fergusons for his services.

The Fergusons had the following property transactions during $2022$:

On May $5,$ the City Council condemned unimproved land owned by Gunnar for the construction of a new fire station. He purchased the land $($two vacant lots at $3400$ and $3402$ Maple Lane$)$ as an investment on May $25,2012,$ for $$14,000.$ In exchange for the lots, the city gave Gunnar a large unimproved lot at $440$ Washington Street that was valued at $$20,000.$ All in all, he was satisfied with the exchange because the Washington Street property is in a better neighborhood and has a greater potential for appreciation.

On August $22,$ Gunnar sold a gun collection for $$32,000$ to an avid collector. The collection was a gift from Gunnar$$s father on December $25,2014,$ when it was worth $$22,000.$ His father bought the collection in $1997$ for $$14,000.$ Gunnar$$s sale of the collection was documented by a bill of sale, signed by both Gunnar and the buyer.

On September $9,$ the Fergusons sold $3,000$ shares of Raptor Pharmaceuticals for $$2,000.$ The couple purchased the stock on December $4,2021,$ for $$25,000.$ The investment was motivated by the rumor that Raptor was developing a new drug for infertility. On September $7,$ the FDA announced that it would not approve the drug due to adverse side effects, and the price of Raptor stock plummeted. The Fergusons$$ broker provided them with a Form $1099$B$,$ which reported the gross proceeds from the sale and their basis in the stock.

The Fergusons have a long$-$term capital loss carryover of $$1,500$ from $2021.$

In March $2022,$ the Fergusons were audited by the Iowa Department of Revenue for tax years $2019$ and $2020.$ The audit proposed no changes for the $2019$ tax return. However, the Fergusons were assessed $$2,250$ additional income tax for $2020($no interest or penalties were assessed$).$ The Fergusons agreed with the assessment and paid the $$2,250$ immediately.