In December 2019, Emily, a cash basis taxpayer, received a $2,500 cash scholarship for the spring semester of 2020.
However, she did not use the funds to pay the tuition until January 2020.Emily can exclude the $2,500 from her gross income in 2019.

Question

Quizplus · Accepted Answer

Under cash basis accounting, income is recognized when received. Scholarships used for tuition are generally excludable from gross income, even if the payment is made in a different year.

In December 2019, Emily, a Cash Basis Taxpayer, Received a $2,500