A scholarship recipient at State University may exclude from gross income the scholarship proceeds used to pay for:

Question

Quizplus · Accepted Answer

According to IRS regulations, scholarship proceeds used to pay for tuition, fees, books, and supplies are tax-free. However, any portion of the scholarship used to pay for room and board, or other non-qualified expenses, must be included in gross income. Therefore, option B is the best choice as it includes tuition, books, and supplies which are tax-free expenses.

A Scholarship Recipient at State University May Exclude from Gross