[The following information applies to the questions displayed below.] For each of the following situations, indicate how much the taxpayer is required to include in gross income and explain your answer: (Leave no answer blank. Enter zero if applicable.)

a. Steve was awarded a $7,750 scholarship to attend State Law School. The scholarship pays Steve's tuition and fees.

b. Hal was awarded a $15,700 scholarship to attend State Hotel School. All scholarship students must work 10 hours per week at the School residency during the term.

a. How much of scholarship is Steve required to include in his gross income?

b. What is the amount of scholarship Hal should include in his gross income?