Shaun is a student who has received an academic scholarship to State University. The scholarship paid $14,000 for tuition, $2,500 for fees, and $1,000 for books. In addition, Shaun's dormitory fees of $8,500 were paid by the university when he agreed to counsel freshman on campus living. What amount must Shaun include in his gross income?

Question

Quizplus · Accepted Answer

$8,500. According to IRS guidelines, scholarships that cover tuition, fees, and books are not taxable. However, payments for services, such as counseling, must be included in gross income. Therefore, Shaun must include the $8,500 for dormitory fees in his gross income, as this was compensation for services rendered.

Shaun Is a Student Who Has Received an Academic Scholarship