Graham has accepted an offer to do graduate work in the chemistry department at State University. The chemistry department offered Graham a $5,000 tuition reduction and $3,500 toward the cost of room and meals. Under the terms of the scholarship Graham must work in the chemistry labs during the summer as a research assistant. What amount must Graham include in his gross income?

Question

Quizplus · Accepted Answer

The $3,500 provided for room and meals is considered taxable income, as it is not used directly for tuition or course-related expenses. The $5,000 tuition reduction is not taxable as it is a qualified scholarship used for tuition.

Graham Has Accepted an Offer to Do Graduate Work in the Chemistry