$20$X$1,$ Rose returned to work. On December $15,20$X$1,$ the lawsuit was settled received the following amounts:

Compensation for lost wages

Personal injury damages awarded $(noneof$ which was for punitive damages$)$ $$25,000$

$40,000$

How much of the settlement must Rose include in ordinary income on her $20$X$1$ tax return?

$$0$

$$25,000$

$$40,000$

$$65,000$