Irvin Heard, Jr. - Page 9

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          the additional time to complete his dissertation research and the           
          requirements for the Ph.D. degree.  The extension request was               
          granted by NIGMS in June 1990.  Petitioner received a stipend of            
          $25,000 and an institutional allowance of $3,000 for the period             
          June 20, 1990, to June 19, 1991.  Petitioner remained at CUNY for           
          the extended period of his MARC fellowship; however, he did not             
          complete his Ph.D. degree.                                                  
                                       OPINION                                        
               Section 117(a) excludes from gross income any amount                   
          received as a scholarship or fellowship grant.  Generally, a                
          "scholarship" or "fellowship grant" includes an amount paid to or           
          for the benefit of an individual to aid him or her in the pursuit           
          of study or research.  Sec. 1.117-3, Income Tax Regs.  The fact             
          that the recipient is required to furnish reports of his or her             
          progress to the grantor does not destroy the essential character            
          of such an amount as a scholarship or fellowship grant.  Sec.               
          1.117-4(c)(2), Income Tax Regs.  In Bingler v. Johnson, 394 U.S.            
          741, 751 (1969), the Supreme Court sustained the validity of                
          these regulations as comporting with the ordinary understanding             
          of scholarships and fellowships as "relatively disinterested, 'no           
          strings' educational grants, with no requirement of any                     
          substantial quid pro quo from the recipients."                              
               Prior to amendment by the Tax Reform Act of 1986 (TRA 1986),           
          Pub. L. 99-514, sec. 123, 100 Stat. 2085, 2112, section 117                 
          permitted the entire amount of a fellowship grant to be excluded            




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