James Dean received the following this year. $\begin{array}{lr}
\text {Scholarship for college tuition and fees }&\$20,000\
\text {Scholarship for college room and board }&\$13,100\
\text { chamber of Commerce citizenship award }&\$1,500\
\text { Inheritance from great uncle}&\$38,000\
\end{array}$
Compute James' gross income.

Question

James Dean received the following this year. $\begin{array}{lr}
\text {Scholarship for college tuition and fees  }&\$20,000\
\text {Scholarship for college room and board }&\$13,100\
\text { chamber of Commerce citizenship award }&\$1,500\
\text { Inheritance from great uncle}&\$38,000\
\end{array}$
 Compute James' gross income.

Quizplus · Accepted Answer

The scholarship amount for tuition and fees ($20,000) is not taxable. The scholarship for room and board ($13,100) exceeds educational expenses and is taxable. The Chamber of Commerce citizenship award ($1,500) is also taxable if it is not specifically for education expenses. The inheritance ($38,000) is not considered income for tax purposes. Therefore, James' gross income is the sum of the taxable scholarship for room and board and the citizenship award, which totals $14,600.

James Dean Received the Following This Year Compute James' Gross Income