Taxable scholarships?

[Pseudonymous Electron]

On 12/18/2012 04:19 PM, Mike or Penny Novack wrote:
> 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.

Ah, OK, this makes sense. I was kinda hoping that there would be 
something in the tax options that would cause this to be figured 
automatically (i.e. so it would update itself if I corrected a 
mis-categorized expense or something), but this will suffice, at least 
for now.  Thank you for the advice.

Now, what would be the best tax category for the "scholarship taxable" 
account?  Currently, I've assigned it to "F1040 Taxable fringe 
benefits", which does cause the tax report to correctly claim that this 
income should be included in F1040 line 7, but this doesn't seem right, 
since these scholarships aren't "fringe benefits".

Have a good one,
P. Electron