Question

Westin was a major league baseball pitcher who earned $10,000,000 for his 20 wins this year. Saul was also a major league baseball pitcher before a career ending injury caused by a negligent driver. Saul sued the driver and collected $6,000,000 as a compensation for lost estimated future income as a pitcher and $4,000,000 as punitive damages. Do the amounts that Westin and Saul receive have the same effect on their gross income? Explain.

Answer 1

solutione The amount which is received by sam will not be the taxable Because the amount is the payment for the Injury to sam, the amant of 6 millions is not the taxable.