Taxable scholarships?

Pseudonymous Electron pseudonymous_electron at lavabit.com
Mon Dec 17 23:27:15 EST 2012


Hello all,

(First off, thanks very much for making and supporting GnuCash, it is a
pleasure to use.)

U.S. IRS form 1040 requires the filer to report as taxable income the
portion of college scholarship income that was used for expenses other
than "tuition and course-related expenses".  Here's the relevant extract
from the 1040 instruction book:

> [...] the following types of income must also be included in the
> total on line 7.
[...]
> * Scholarship and fellowship grants not reported on Form W-2. Also,
> enter “SCH” and the amount on the dotted line next to line 7.
> However, if you were a degree candidate, include on line 7 only the
> amounts you used for expenses other than tuition and course-related
> expenses. For example, amounts used for room, board, and travel must
>  be reported on line 7.
(http://www.irs.gov/pub/irs-pdf/i1040.pdf, page 19)

I've interpreted this to mean that

   [taxable scholarship] = [total scholarship] - [tuition+books]

and that this must be reported if it's greater than zero.

How does one setup the GnuCash tax options so as to handle this?  I 
cannot find a relevant tax category for line-7 "SCH" income in the tax 
options window, and if I associate another income tax category to my 
"scholarships" income account, I can't figure out how to get it to 
subtract out the expenses from my "tuition" expense account.

Thanks in advance for any advice you can provide!

Have a good one,
P. Electron



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