Athletic Scholarships

[bh2os]

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

 

[JoeTaxpayer]

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.

 

[Alan]

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.

 

[Bill Brown]

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.

 

[Amen Coder]

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.

 

[MikeM]

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.

 

[BerkshireCPA]

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