Question

Brian had the following items of income this year. • Salary - $22,000 • Child support received - $6,000 • Alimony received - $10,000 (2006 divorce decree) • Personal injury award from an auto accident. He lost the use of his left hand and was awarded compensatory damages of $200,000. He also received $50,000 in punitive damages. Calculate Brian’s gross income for the current year.

Answer 1

Answer:

$82000

Explanation:

Gross income is defined as the total sum of money received (salary, wages, rents, interests and other form of earnings) that an individual or a household receive before any deductions or taxes. Hence,

Given that

Salary = 22000

Alimony = 10000

Punitive damage = 50000

Gross income = 22000 + 10000 + 50000

= $82000

The child support and compensatory damages are not added because they are not taxable.

Answer 2

Answer:

$82000

Explanation:

Gross income = Salary 22000 + Alimony received 10000 + punitive damages 50000 = $82000

Child support is tax free compensatory damage for the physically visible bodily injury need not be reported to IRS