"neil[at]neilbbaker.com" <bakern[at]giganews.com> wrote:

- quote -

Scholarships may or may not be fully or partially taxable.
Its one of those "it depends" on facts & circumstances.

___________________________________
<<< Benjamin Yazersky, CPA [NJ & NY] > > -----> real address on hobokeni or hobokenx <-----

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bak...[at]giganews.com (n...[at]neilbbaker.com) wrote:

- quote -

You can get varying opinions from the IRS on taxable
scholarships. Start with the terms of the scholarship--what
was it intended to cover? Then read Publication 970 for a
definition of "qualifying education expenses" (for a
degree-seeking student at an eligible institution)--there
may or may not be additional expenses beyond what is
reported on the 1098-T. But the terms of the scholarship
must be examined.

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The 1098-t shows the following $
box 1 Payments received for qualified ....$ 8100
box 18 Scholarships or grants ........... 18600

Using tubotax (tax year 2006), box 5 was added to 1040 line
7 as additional earnings and box 1 was used to calc the
deduction/credit.

Is this correct? The full scholarship is taxed and then
reduced by either the deduction or credit?

This is not my return so I don't have all the details but
from the 1099-t can I assume that only part of the
scholarship was used to pay for the qualified expenses? The
taxpayer is on a teaching scholarship at the university.

Tia for any help you can provide.
Neil

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