Ashley received a scholarship to be used as follows: tuition, $6,000; room and board, $9,000; and books and laboratory supplies, $2,000.Ashley is required to include only $9,000 in her gross income.

Question

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The scholarship stated that $9,000 is for room and board which means that it is being considered as a qualified education expense and can therefore be excluded from gross income. The remaining $8,000 (tuition and books/lab supplies) may be taxable if they exceed the total amount of qualified education expenses.

Ashley Received a Scholarship to Be Used as Follows: Tuition