Athletic Scholarships

Discussion in 'Tax' started by bh2os, Jan 14, 2011.

  1. bh2os

    bh2os Guest

    My nephew received 100% athletic scholarship for 2010. No out of
    pocket expenses except for minor things. Anyway, each time I search I
    come up with the room and board part is taxable to my nephew, is this
    correct? And where does it go on the return?

    tks all

    --
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    bh2os, Jan 14, 2011
    #1
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  2. bh2os

    JoeTaxpayer Guest

    On 1/14/11 12:40 PM, bh2os wrote:
    > My nephew received 100% athletic scholarship for 2010. No out of
    > pocket expenses except for minor things. Anyway, each time I search I
    > come up with the room and board part is taxable to my nephew, is this
    > correct? And where does it go on the return?
    >
    > tks all


    From http://www.irs.gov/individuals/students/article/0,,id=96674,00.html
    -----------
    If you are a candidate for a degree, you generally can exclude from
    income that part of the grant used for:

    * Tuition and fees required for enrollment or attendance, or
    * Fees, books, supplies, and equipment required for your courses.

    You cannot exclude from income any part of the grant used for other
    purposes, such as room and board.
    ----------

    So, yes, R&B taxable.
    Joe
    www.joetaxpayer.com

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>
     
    JoeTaxpayer, Jan 14, 2011
    #2
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  3. bh2os

    Alan Guest

    On 1/14/11 11:24 AM, JoeTaxpayer wrote:
    > On 1/14/11 12:40 PM, bh2os wrote:
    >> My nephew received 100% athletic scholarship for 2010. No out of
    >> pocket expenses except for minor things. Anyway, each time I search I
    >> come up with the room and board part is taxable to my nephew, is this
    >> correct? And where does it go on the return?
    >>
    >> tks all

    >
    > From http://www.irs.gov/individuals/students/article/0,,id=96674,00.html
    > -----------
    > If you are a candidate for a degree, you generally can exclude from
    > income that part of the grant used for:
    >
    > * Tuition and fees required for enrollment or attendance, or
    > * Fees, books, supplies, and equipment required for your courses.
    >
    > You cannot exclude from income any part of the grant used for other
    > purposes, such as room and board.
    > ----------
    >
    > So, yes, R&B taxable.
    > Joe
    > www.joetaxpayer.com
    >

    and.... see the instructions for how you report taxable scholarships on
    Line 7.

    --
    Alan
    http://taxtopics.net

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>
     
    Alan, Jan 14, 2011
    #3
  4. bh2os

    Bill Brown Guest

    On Jan 14, 12:40 pm, bh2os <> wrote:
    > My nephew received 100% athletic scholarship for 2010.  No out of
    > pocket expenses except for minor things.  Anyway, each time I search I
    > come up with the room and board part is taxable to my nephew, is this
    > correct?  And where does it go on the return?
    >



    I believe that the taxable portion of scholarship(s) is the amount by
    which total scholarship assistance exceeds the total cost of tuition,
    fees, books and supplies no matter what the scholarship issuer says
    the money is for.

    I'll rely on someone else to look it up and prove me wrong. :)

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>
     
    Bill Brown, Jan 15, 2011
    #4
  5. bh2os

    Amen Coder Guest

    On Jan 14, 9:40 am, bh2os <> wrote:
    > My nephew received 100% athletic scholarship for 2010.  No out of
    > pocket expenses except for minor things.  Anyway, each time I search I
    > come up with the room and board part is taxable to my nephew, is this
    > correct?  And where does it go on the return?
    >
    > tks all


    The portion of the scholarship that exceeds tuition, books, and fees
    is taxable. The taxable amount is entered on the line for wages (line
    7 if Form 1040 is filed) with the notation "SCH" to the left of the
    amount. If you claim your son as a depenent, the taxable portion of
    the scholarship is considered earned income for purposes of figuring
    his standard deduction. For more information, see IRS Publication
    970.

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>
     
    Amen Coder, Jan 18, 2011
    #5
  6. bh2os

    MikeM

    Joined:
    Mar 21, 2011
    Messages:
    1
    Not So Fast...

    My son was also fortunate enough to be awarded a full-ride scholarship.

    Spoke with an IRS agent this morning who indicated determination of taxable room and board depends on whether the university in question deems room and board, or a portion thereof to be 'qualified'. He then proceeded into a very circular non-explanation of what 'qualified' meant.

    I agree, based on what I've read in publication 970 that room and board should be considered taxable income with the notation of SCH.

    Something to consider:
    Travel is also considered taxable. Major college basketball programs could easily incur many thousands of dollars per player in travel expenses to away games and tournaments. Are these players expected to pay taxes on the amount of travel expenses? What about hotel rooms and meals? I find it very hard to believe Student Athletes have the means to pay the tax bill for the amount spent for away-game travel, lodging and meals. Universities are not required to report these amounts, therefore it isn't included on the 1098-T and the students simply don't report it.

    A letter from the House Ways and Means Committee to the NCAA indicated major universities spent up to $600,000 per mens basketball player in the 2004-05 season. I find this very difficult to believe and I probably didn't read it correctly, however if it's true, wouldn't those players have a hefty tax bill? Unable to post the link due to my low post count.
     
    MikeM, Mar 21, 2011
    #6
  7. bh2os

    BerkshireCPA

    Joined:
    Nov 8, 2011
    Messages:
    1
    Not Taxable

    Take a look at Rev Rul 77-263

    Athletic scholarships are not taxable, even the room & board portion.


    Excluded on Section 117.4
     
    BerkshireCPA, Nov 8, 2011
    #7
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