McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 43

For each of the following situations, indicate how much the taxpayer is required to include in gross income and explain your answer:
a.Steve was awarded a $5,000 scholarship to attend State Law School.The scholarship pays Steve's tuition and fees.
b.Hal was awarded a $15,000 scholarship to attend State Hotel School.All scholarship students must work 20 hours per week at the School residency during the term.
c.Bill was the recipient of an athletic scholarship that pays his $12,000 tuition to State University and provides him with a $500 per month stipend (for 12 months) to pay for food and housing.The scholarship requires Bill to participate in athletic competition each term.