Taxable scholarships?

[Mike or Penny Novack]

>
>
> 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.

Maybe this has nothing to do with built in "tax options"?

OK, you are trying to track taxable vs non taxable income. But you have 
here described a situation where at the time received you cannot 
determine what portion of the scholarship income will be taxable and 
which part not. You might know exactly what your tuition expense will be 
but you would scarcely know in advance what your total books expense 
will be.

It is NOT uncommon to need to make end of year adjustments. What I'd 
suggest is that you have an income account for "scholarship tax 
unallocated" and then ones for "scholarship taxable" and "scholarship 
non-taxable". You will have expense accounts for "tuition" and "books".

At the end of your fiscal year you will know the total spent on tuition 
and books. You transfer this amount from "scholarship tax unallocated" 
to "scholarship non-taxable" and the rest to "scholarship taxable" 
(closing out "scholarship tax unallocated"). You could do this "as you 
go" but that would be a lot of extra work for little benefit.

Michael