Question

Shaun is a student who has received an athletic scholarship to State University. The scholarship paid $14,000 for tuition, $2,500 for fees, and $1,000 for books. In addition, Shaun's dormitory fees of $8,500 were paid by the University when he agree to counsel freshman on campus living. What amount must Shaun include in his gross income?

A. $9,500
B. $11,000
C. $2,500
D.$8,500

Answer 1

The amount Shaun will include is $8,500; option D

Step-by-step explanation:

In this question, we are asked to state what Shaun will include in his gross income

The part of the scholarship which pays for tuition, fees, books, supplies and other equipment required for student's course are exempt from tax. Other scholarship amount is fully taxable. Thus, the correct option is Option D, $8,500