Irvin Heard, Jr. - Page 10
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from gross income provided that the grant did not represent
payment for teaching, research, or other services in the nature
of part-time employment and as long as the recipient was a
candidate for a degree. For individuals who were not candidates
for a degree, the exclusion was limited to $300 per month for a
maximum of 36 months. Sec. 117(b)(2)(B).
TRA 1986 sec. 123, 100 Stat. 2112, modified the income tax
treatment of scholarships and fellowship grants by making
amendments to section 117. Section 117(a), as amended, excludes
from gross income "any amount received as a qualified scholarship
by an individual who is a candidate for a degree at an
educational organization described in section 170(b)(1)(A)(ii)."
The term "qualified scholarship" refers to "any amount received
by an individual as a scholarship or fellowship grant to the
extent the individual establishes that, in accordance with the
conditions of the grant, such amount was used for qualified
tuition and related expenses." Sec. 117(b)(1), as amended. The
term "qualified tuition and related expenses" means (a) tuition
and fees required for enrollment or attendance of a student at an
educational organization described in section 170(b)(1)(A)(ii),
and (b) fees, books, supplies, and equipment required for courses
of instruction at such an educational organization. Sec.
117(b)(2), as amended. The amendments to section 117 eliminated
the exclusion for individuals who are not degree candidates.
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