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15 July, 14:19

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?

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  1. 15 July, 14:49
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    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)
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