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In 2014, Bob was in an automobile accident and suffered

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In 2014, Bob was in an automobile accident and suffered physical injuries. The accident was caused by a driver for Amber Trucking Company. Bob threatened to sue Amber for $250,000, which said was $50,000 for pain and suffering, $30,000 for loss of income, and $170,000 in punitive damages. Amber’s insurance company will not pay punitive damages Therefore, Amber has offered to settle the entire case for $75,000. How much gross income does Bob have if he accepts that offer?
Submitted: 1 year ago.
Category: Single Problem
Expert:  tjgesq replied 1 year ago.

Hello and thank you for the opportunity to assist you. My name is ***** ***** I will do my very best to answer your legal questions.

Based on what you wrote, Bob would have $30,000 taxable income since that represents loss of income.

As an aside, it makes sense that the insurance company wouldn't pay punitive damages. Punitive damages are only given in cases where the tortfeaser acts purposefully, and the insurance policy likely only covers negligent conduct. Also, Amber would not likely even be liable for purposeful conduct, so it sounds like the settlement as you describe makes sense.

Does that answer your question? Please let me know if you need clarification, as I am happy to continue helping you until you are satisfied.

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