Question: In 2014 Randall suffered bodily injury while at work. On his 2014 tax return, Randall deducted related medical expenses of $10,000 and $5,000 in 2015.

In 2014 Randall suffered bodily injury while at work. On his 2014 tax return, Randall deducted related medical expenses of $10,000 and $5,000 in 2015. In 2016, Randall won a workers' compensation claim and prevailed in an injury lawsuit, both in connection with the 2014 injury. Randall received the following in 2016 as settlement:
Punitive damages................................................................................$150,000
Workers' compensation...........................................................................50,000
Reimbursement for medical expenses...........................................................25,000
Compensation for emotional distress caused by the injury...................................15,000
What amount of the settlement should be excluded from Randall's 2016 gross income?
a. $ 75,000
b. $ 60,000
c. $ 90,000
d. $165,000

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