Unformatted text preview: excluded from gross income. pp. 5-6, 5-7, 5-9, and 5-10 36. a. Leigh must include in gross income the punitive damages of $50,000. The other amounts ($15,000 and $8,000) may be excluded as arising out of the physical injury, except the $1,000 amount received for damage to her automobile. This amount is a nontaxable recovery of capital (i.e., it reduces her basis for the automobile by $1,000). b. The $40,000 is included in Leigh’s gross income because it did not arise out of a physical personal injury. pp. 5-11 and 5-12...
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- Spring '10
- Injury, Leigh, individual tax accounting