Jim is a graduate accounting student at University. The university awarded Jim a $1,000 scholarship. He also works as a half-time teaching assistant in the school. 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. Jim paid $500 for books and supplies and incurred living expenses of $7,400.

What is his deduction? What amounts are taxable and which should be included in his tax return? Need detailed steps and reasons