Must Linda Sue include the $7,500 in punitive damages in her 2023 gross income?
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Linda Sue Carr worked for a large food brokerage firm. In January of this year she was terminated. After a court battle Linda Sue was reinstated in her job and received from the firm in November $7,500 in punitive damages. Must Linda Sue include the $7,500 in punitive damages in her 2023 gross income?
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- In 2014 Jack suffered bodily injury while at work. In 2016, Jack won a workers' compensation claim and prevailed in an injury lawsuit, both in connection with the 2014 injury. Jack received the following in 2016 as settlement: Punitive damages $150,000 Workers' compensation $50,000 Personal physical injury damages $25,000 Compensation for emotional distress caused by the physical injury $15,000 What amount of the settlement should be excluded from Jack's 2016 gross income? $25,000 $165,000 $90,000 $75,000Christie sued her former employer for a back injury she suffered on the job in 2021. As a result of the injury, she was partially disabled. In 2022, she received $240,000 for her loss of future income, $160,000 in punitive damages because of the employer's flagrant disregard for the employee's safety, and $15,000 for the reimbursement of medical expenses. What's Christie's gross income in 2021? Please explain.Classify each of the following cases as "Included in" or "Excluded from" gross income. Included in/Excluded from Gross Income a. Eloise received $150,000 in the settlement of a sex discrimination case against her former employer. b. Nell received $10,000 for damages to her personal reputation. Nell also received $40,000 in punitive damages. c. Orange Corporation, an accrual-basis taxpayer, received $50,000 from a lawsuit it filed against its auditor, who overcharged for services rendered in a previous year. d. Beth received $10,000 in compensatory damages in a lawsuit she filed against a tanning parlor for severe burns she received from using the parlor's tanning equipment. Beth also received $30,000 in punitive damages in the lawsuit against the tanning parlor. e. Joanne received compensatory damages of $75,000 from a cosmetic surgeon who botched her nose job. Joanne also received $300,000 in punitive damages from the cosmetic surgeon who…
- On May 1, 2020, Anthony was in an automobile accident while on his way to work. Following doctor’s advice, Anthony stayed home for six months to recover from his injuries. While at home, Anthony filed a lawsuit against the other driver. On December 1, 2020, the lawsuit was settled and Anthony received the following amounts: Compensation for lost wages $30,000 Personal injury damages (none of which was for punitive damages) 50,000 How much of the settlement must Anthony include in ordinary income on his 2020 tax return?1. You are a Tax Consultant for an Accounting firm. Your client has emailed you with a question. She loaned $20,000 to a co-worker to begin a new business several years ago. If her co-worker declares bankruptcy on August 15 of the current year, is Amy allowed to deduct the bad debt loss this year? Additionally, she wants to know if she can deduct the loss, what is the character of the loss?Haresh
- It is now December 31, 2020 (t = 0), and a jury just found in favor of a woman who sued the city for injuries sustained in a January 2019 accident. She requested recovery of lost wages plus $300,000 for pain and suffering plus $60,000 for legal expenses. Her doctor testified that she has been unable to work since the accident and that she will not be able to work in the future. She is now 62, and the jury decided that she would have worked for another 3 years. She was scheduled have earned $32,000 in 2019. (To simplify this problem, assume that the entire annual salary amount would have been received on December 31, 2019.) Her employer testified that she probably would have received raises of 3% per year. The actual payment for the Jury award will be made on December 31, 2021. The judge stipulated that all dollar amounts are to be adjusted to a present value basis on December 31, 2021, using a 5% annual interest rate and using compound, not simple, Interest. Furthermore, he stipulated…Eva received $60,000 in compensation payments from JAZZ Corp. during 2020. Eva incurred $5,000 in business expenses relating to her work for JAZZ Corp. JAZZ did not reimburse Eva for any of these expenses. Eva is single and she deducts a standard deduction of $12,400. Based on these facts, answer the following questions: Use Tax Rate Schedule for reference. (Leave no answer blank. Enter zero if applicable.) c. Assume that Eva is considered to be a self-employed contractor. What is her self-employment tax liability and additional Medicare tax liability for the yearKyle, a single taxpayer, worked as a freelance software engineer for the first three months of 2023. During that time, he earned $90,000 of self-employment income. On April 1, 2023, Kyle took a job as a full-time software engineer with one of his former clients, Hoogle Incorporated From April through the end of the year, Kyle earned $198,000 in salary. What amount of FICA taxes (self-employment and employment related) does Kyle owe for the year? Note: Round your intermediate calculations and final answer to the nearest whole dollar amount. Self-employment/FICA tax
- Beam Hines is a translator who works for a consulting firm in Mississauga. Her 2020 salary is $73,500, from which her employer, a Canadian controlled private company, deducts maximum CPP and EI contributions. Also deducted is an RPP contribution of $2,600. The employer makes a matching contribution ($2,600). Her employment compensation does not include any commission income. Other Information:1. To reward Beam for her outstanding work, and as an incentive to stay with the company, her employer has awarded her a bonus of $10,000 that will be paid in August 2021. 2. Beam received options to purchase 200 shares of her employer’s stock at a price of $72 per share last year. At the time the options were granted, the fair market value of the shares was $74 per share. During May 2020, when the shares had a fair market value of $90 per share, Beam exercises all of these options. She is still holding these shares at the end of the year. (Note: please mention the result of stock options benefit…Cooper is a CPA and prepared several tax returns during the current tax year for compensation. In the rush to get returns filed timely, he failed to sign three of the returns that he prepared. How much is his failure to sign penalty? Question 12 options:Clem is married and is a skilled carpenter. Clem's wife, Wanda, works part time as a substitute grade school teacher. Determine the amount of Clem's expenses that are deductible for AGI this year (if any) under the following independent circumstances: Note: Leave no answer blank. Enter zero if applicable. a. Clem is self-employed, and this year he incurred $830 in expenses for tools and supplies related to his job. Because neither was covered by a qualified health plan, Clem paid health insurance premiums of $5,490 to provide coverage for himself and Wanda (not through an exchange).What is the deductible amount for AGI? b. Clem and Wanda own a garage downtown that they rent to a local business for storage. This year they incurred expenses of $1,270 in utilities and $985 in depreciation.What is the deductible amount for AGI c. Clem paid self-employment tax of $17,600 (the employer portion is $8,800), and Wanda had $3,500 of Social Security taxes withheld from her pay.What is the…
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