- 6 -
front of him and he was told to sign it by his
professor. [Emphasis added.]
Therefore, at least $7,141 of his $15,846 stipend
for 1992 should be excluded from taxable income
according to the Proposed Regulation 1.117-6(f)(3). In
addition, he was also required to enroll at the
University of Arizona for six units each semester in
order to maintain his position as a graduate research
associate at an expense of $508 per semester or $1,016
for the year 1992 which should also reduce his taxable
income.
Respondent contends that the $15,846 paid to petitioner by
the University in 1992 was not paid as a scholarship or a
fellowship but was, rather, compensation for services rendered.
Section 117(a) provides that gross income does not include
any amount received as a "qualified scholarship" by an individual
who is a candidate for a degree at an educational organization.
Under section 117(b)(1), the term "qualified scholarship" means
any amount received by an individual as a scholarship or
fellowship grant to the extent such amount was used for
"qualified tuition and related expenses". Under section
117(b)(2), the term "qualified tuition and related expenses"
means only tuition and fees required for enrollment and other
required fees, books, and equipment required for courses of
instruction at such educational organization. Section 117(c)
provides that gross income includes any portion of amounts
received as a scholarship or fellowship grant representing
payment for teaching, research, or other services by the student
required as a condition for receiving the qualified scholarship.
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