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

Question

Quizplus · Accepted Answer

According to IRS guidelines, scholarships used for qualified education expenses such as tuition, fees, books, and supplies are generally not taxable. Therefore, Ashley can exclude the tuition and books/supplies portions of her scholarship from her gross income. However, the room and board portion is generally considered taxable income unless it is specifically required as a condition of the scholarship. As the question does not mention any such requirement, we must assume that Ashley can only exclude the $6,000 used for tuition and books/supplies and must include the remaining $6,000 for room and board in her gross income.

Ashley Received a Scholarship to Be Used as Follows: Tuition