My client is a 50 year old high school teacher who took two courses in 2008 for college credit, one at University of Cincinnati and one at Miami of Ohio. He received a1098-T from each college showing the cost of the tuition and reflecting a scholarship in box 5 for an equal amount so the courses were ³free². IRS Pub 590 indicates that they are tax free only if you are a candidate for a degree and you use the money to pay for qualified educational expenses. He was not enrolled as a degree candidate, just taking professional enrichment education.
Being enrolled as a degree candidate seems to be a clear requirement. The total amount is $6630 in income so it makes a significant difference. Section 117 was not much because it does not define "degree candidate". Any insights you can add?
§ 117. Qualified scholarships (a) General rule Gross income does not include any amount received as a qualified scholarship by an individual who is a candidate for a degree at an educational organization described in section 170 (b)(1)(A)(ii). (b) Qualified scholarship For purposes of this section? (1) In general The term ³qualified scholarship² means any amount received by an individual as a scholarship or fellowship grant to the extent the individual establishes that, in accordance with the conditions of the grant, such amount was used for qualified tuition and related expenses. Uncompensated advice guaranteed correct or double your money backFrank S. Duke, Jr. CPA Cincinnati, OH USA