In 2016, windsor knott, and employee of the victoria tie company, was seriously injured in the factory stockroom. He was hospitalized for 30 days and lost partial use of his left hand. During his hospitalization and recovery period, he received the following:
Workers Compensation: $9,000
Medical expenses reimbursement: 10,000
Disability insurance benefits (insurance paid by taxpayer): 4,000
Accident and health insurance benefits (company policy benefits based on the degree of permanent injury): 9,500
Determine Knott's tax liability with regard to these payments. If the medical expenses had been deducted from Knott's 2016 tax return and reimbursement was received in 2017, how would the reimbursement be reflected in the 2017 return?