Question

Taxpayer, age 19, is a full-time graduate student at State University. During 2017, he received the following payments:

Income from college financial aid office	$ 1,500
Resident adviser housing	2,500
State scholarship for ten months (tuition and books)	6,000
State scholarship (meals allowance)	2,400
Cash award for being the outstanding resident adviser	3,000
Cash support from parents	2,000
	$17,400

Taxpayer served as a resident adviser in a dormitory and, therefore, the university waived the $2,500 charge for the room he occupied. What is Taxpayer 's adjusted gross income for 2017?

A. $1,500.

B. $9,000

C. None of these choices are correct.

D. $3,900.

E. $15,400

Answer 1

Correct Answer is C.

Taxpayer Adjusted Gross Income for 2017= $ 2,400 + $ 3,000 = $ 5,400.

The loan amount of $1,500 is not Income.

The amount of $2,500 for resident advisor housing is not to be included in gross Income.

The State Scholorship for tution and books of $ 6,000 is to be excluded from Gross Income.

The State Scholorship for meal allowance of $ 2,400 is to beincluded in Gross Income.

The cash award of $3,000 for being the outstanding resident advisor is to be included in gross Income.

Cash Support from Parents can not be included in Gross Income.