Your friend Scotty informs you that in 2019 he received a tax-free reimbursement of some medical expenses he paid in 2018.Which of the following statements best explains why Scotty is not required to report the reimbursement in gross income?
A)Scotty itemized deductions in 2018.
B)Scotty did not itemize deductions in 2018.
C)Scotty itemized deductions in 2019.
D)Scotty did not itemize deductions in 2019.
E)Scotty itemized deductions in 2019 but not in 2018.

Question

Quizplus · Accepted Answer

Scotty is not required to report the reimbursement in gross income because he did not itemize deductions in 2018. If he had itemized and deducted these medical expenses, a reimbursement would typically be considered taxable income. Since he did not itemize, there's no need to report the reimbursement as income.

Your Friend Scotty Informs You That in 2019 He Received