Question: I need some help and clarification on this assignment. Mya Lucky Day was unable to work in 2018 (thanks to a workplace injury sustained last

I need some help and clarification on this assignment.

Mya Lucky Day was unable to work in 2018 (thanks to a workplace injury sustained last year); nonetheless, she still amassed a material amount of gross income in 2018 from various sources. Mya has asked for your assistance in determining how much of the $511,830 gross income she realized in 2018 must also be recognized as taxable income on her 2018 individual income tax return. She also needs help with the proper presentation of the recognized income amounts on her Form 1040 and Schedule 1.

Sources of Income

Amount Realized

Amount Recognized

Source Document

Additional Details

BINGO grand prize winner

1,700

1680

Form W-2G

Paid $20 for BINGO card

Annual neighborhood poker tournament

2,500

2350

None

Paid $150 for buy-in

Alimony received

36,250

36250

Divorce decree

Ties to legally binding 2017 divorce settlement agreement

Child support received

48,000

48000

Divorce decree

Ties to legally binding 2017 divorce settlement agreement

Disability insurance proceeds

22,200

16650

Form 1099-R

Mya paid 25% of the monthly disability insurance premiums using after-tax dollars; Myas employer covered the remaining 75%

Proceeds from homemade candle sales

480

480

None

Paid $525 for candle-making supplies (candle-making is a hobby for Mya)

Workers compensation

17,500

17500

Employment agreement

Amounts were received from a state-sponsored workers compensation plan

Lawsuit proceeds lost wages

41,200

Legal settlement

Lawsuit was related to a physical injury

Lawsuit proceeds emotional distress

15,000

Legal settlement

Lawsuit was related to a physical injury

Lawsuit proceeds punitive damages

75,000

Legal settlement

Lawsuit was related to a physical injury

Birthday card money

2,000

None

Birthday cash from Great-Aunt Tilda to Mya, her favorite niece

Life insurance proceeds

250,000

Insurance policy

Proceeds received when poor Great-Aunt Tilda passed away later in the year (Mya was her beneficiary)

TOTAL INCOME

$511,830

$132410

379420 374910

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