Question

George is awarded $55,000 in compensatory damages for harm to his reputation and $30,000 in compensatory damages for bodily injury. In addition, George is awarded $275,000 in punitive damages. How much of these awards must George recognize in taxable income?

Answer 1

Answer:

Award recognize in taxable income will be equal to $330000

Explanation:

It is given that George is awarded $55000 in compensation of damage for harm to his reputation

And $30000 is compensatory damages for bodily injury

And at last George awarded $275000 in punitive damage

We have to find total award of George income recognize in taxable income

Award recognize as taxable income will be equal to = damage for harm to his reputation + punitive damage = $55000+$275000 = $330000 ( bodily injury award will not be recognize in taxable income)