Facts Betty Bettor stole $30,000 from her employer during 2020 to support her gambling habits. Her...
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Facts Betty Bettor stole $30,000 from her employer during 2020 to support her gambling habits. Her employer discovered the missing funds in 2021 and fired Betty. On her way home after losing her job, Betty was physically injured in an automobile accident when another driver ran a red light and hit Betty's car. The court awarded Betty $30,000 in compensatory damages and $15,000 to cover the medical expenses that she incurred as a result of the accident. In 2022, Betty used the $30,000 that she received to repay her former employer for the stolen funds. Issues (1) How much of the stolen $30,000, if any, should Betty include in her gross income for 2020 and 2021? (2) How does the receipt of the $30,000 in compensatory damages and the $15,000 for medical expenses affect Betty's gross income? (3) How does Betty's $30,000 repayment to her former employer affect Betty's tax liability? Facts Betty Bettor stole $30,000 from her employer during 2020 to support her gambling habits. Her employer discovered the missing funds in 2021 and fired Betty. On her way home after losing her job, Betty was physically injured in an automobile accident when another driver ran a red light and hit Betty's car. The court awarded Betty $30,000 in compensatory damages and $15,000 to cover the medical expenses that she incurred as a result of the accident. In 2022, Betty used the $30,000 that she received to repay her former employer for the stolen funds. Issues (1) How much of the stolen $30,000, if any, should Betty include in her gross income for 2020 and 2021? (2) How does the receipt of the $30,000 in compensatory damages and the $15,000 for medical expenses affect Betty's gross income? (3) How does Betty's $30,000 repayment to her former employer affect Betty's tax liability?
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Tax Implications for Betty 1 Stolen Funds The stolen 30000 in 2020 is considered illegal income and ... View the full answer
Related Book For
Introduction To Federal Income Taxation In Canada
ISBN: 9781554965021
33rd Edition
Authors: Robert E. Beam, Stanley N. Laiken, James J. Barnett
Posted Date:
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