Amber received a scholarship to be used as follows: tuition $6,000;room and board $4,000;and books and laboratory supplies $1,000.Amber is required to include only $4,000 in her gross income.

Question

Quizplus · Accepted Answer

The scholarship is tax-free up to the amount used for qualified educational expenses, which in this case is $11,000 (tuition, room and board, and books/supplies). Since Amber only used $4,000 for room and board, she can exclude the remaining $7,000 from her gross income, making the statement true.

Amber Received a Scholarship to Be Used as Follows: Tuition