Question

For a degree candidate at an eligible institution, the taxable amount of their scholarship is the portion used to pay for __________.

Equipment required for enrollment at an eligible institution.

Room and board.

Tuition and fees.

Required course-related expenses.

Answer 1

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For a degree candidate at an eligible institution, the taxable amount of their scholarship is the portion used to pay for __________.

Solution

As per IRS:

A scholarship or fellowship is tax free only to the extent:

- It doesn’t exceed your qualified education expenses;

- It isn’t designated or earmarked for other purposes (such as room and board), and doesn’t require (by its terms) that it can’t be used for qualified education expenses; and

- It doesn’t represent payment for teaching, research, or other services required as a condition for receiving the scholarship.

So answer is Room and Board Expenses.