Hank is a graduate accounting student at Saluki State University Saluki State awarded Hank a $1,000 scholarship. Hank also works as a half-time teaching assistant in the School of Accountancy at Saluki State. He is paid $7,000 per year and his tuition was waived ($8,000). The salary is equal to that paid to other prat-time instructors. Hank paid $500 for books and supplies and incurred living expenses of $7,400

Tax Sources/Authority:

Provide a list of the tax sources/authority used in your investigation. Provide in descending order of authority with full citation.

Prop Reg 1.117-6. Qualified scholarships

According to sec.117(b)(1)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. However, in sec sec.117(e) also atate that In order to be eligible to exclude from gross income any amount received as a qualified scholarship (as defined in paragraph (c)(1) of this section), the recipient must maintain records that establish amounts used for qualified tuition and related expenses (as defined in paragraph (c)(2) of this section) as well as the total amount of qualified tuition and related expenses.

Analysis:

Includes a summary of the various sources of authority and how they relate to the identified issue(s). The sources should NOT be quoted directly but their citations provided. Explain what the source/authority states and how it relates to the issue(s) being investigated. The sources should be analyzed in the following order: IRC, regulations, rulings or court cases. Be clear on how the rulings and cases relate to the issue(s) at hand.

Conclusion:

Typically one sentence for each issue providing the answer to the question with the applicable authority.

Summary:

Typically more thorough version of Conclusion. Provides a summary of the analysis including the rationale or reasoning for the conclusion.