Question

Indicate whether each item below would be included in or excluded from the income of the recipient.

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a. Payment for laboratory assistant position at University of California State

b. A $1,000 scholarship for tuition

c. College books paid for by grandma and grandpa

d. A $1,000 college loan

e. A scholarship for room and board

f. A new car given to recruit a basketball player

g. A scholarship used for supplies and equipment that are required for courses

Answer 1

Solution:-

a. Payment for laboratory assistant position at University of California State -

To be included in the Income of recipient being consideration for services rendered by him.

b. A $1,000 scholarship for tuition -

Not to be inculded in the income of the recipient being scholarship.

c. College books paid for by grandma and grandpa -

Not to be excluded as the same has been paid by third person.

d. A $1,000 college loan -

No effect as the same is capital in nature.

e. A scholarship for room and board -

Not to be inculded in the income of the recipient being scholarship.

f. A new car given to recruit a basketball player -

No effect as the same is capital in nature.

g. A scholarship used for supplies and equipment that are required for courses-

Not to be inculded in the income of the recipient being scholarship.

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