5 pages of Tax Research Case due on 3:00 PM,Feb 8

Prepare ;a ;tax ;research ;memorandum ;in ;good ;form ;(Facts, ;Key ;Issue(s), ;Conclusion, ;and ;Reasoning ;and ;Authorities) ;to ;determine ;the ;proper ;tax ;treatment ;for ;each ;of ;the ;amounts ;received ;by ;Dan ;Driver ;in ;the ;following ;case. ;You ;should ;prepare ;your ;solution ;in ;Word. ;You ;should ;integrate ;the ;authorities ;you ;cite ;into ;your ;reasoning ;in ;the ;last ;part. ;Do ;NOT ;just ;list ;the ;authorities ;you ;used. ;Cite ;the ;authorities ;and ;explain ;how ;they ;apply ;to ;this ;case. ;Your ;authorities ;should ;include ;more ;than ;Code ;sections ;and ;Treasury ;Regulations. ;You ;should ;have ;at ;least ;one ;court ;case ;or ;Revenue ;Ruling ;in ;your ;analysis.

Facts

Dan ;Driver ;was ;badly ;injured ;in ;an ;automobile ;accident ;in ;January ;2014. ;The ;other ;driver ;Wendy ;Sheets ;was ;intoxicated ;at ;the ;time ;of ;the ;accident. ;Wendy ;was ;clearly ;at ;fault. ;Dan ;paid ;$150,000 ;for ;medical ;expenses ;during ;2014. ;He ;has ;not ;filed ;his ;return ;for ;2014, ;so ;he ;has ;not ;deducted ;these ;medical ;expenses. ;Dan ;sued ;Wendy ;in ;September ;2014, ;won ;a ;judgment ;against ;her, ;and ;received ;following ;in ;cash ;from ;Wendy’s ;insurance ;company ;in ;November ;2014 ;(she ;wisely ;had ;a ;$1,000,000 ;umbrella ;policy) ;as ;follows:

Reimbursement ;for ;medical ;expenses$150,000

Lost ;wages ;50,000

Pain ;and ;suffering ;635,000

Punitive ;damages115,000

Total ;amount ;received$950,000

What ;is ;the ;proper ;tax ;treatment ;of ;each ;of ;these ;amounts ;Dan ;Driver ;received?

Hint: ;Begin ;your ;research ;by ;reviewing ;Section ;61(a) ;and ;Section ;104. ;Conduct ;research ;using ;the ;RIA ;Checkpoint ;service.