Question

Graham has accepted an offer to do graduate work in the chemistry department at State University. The chemistry department offered Graham a $5,000 tuition reduction and $3,500 toward the cost of room and meals. Under the terms of the scholarship Graham must work in the chemistry labs during the summer as a research assistant. What amount must Graham include in his gross income

Answer 1

Answer: $3500

Explanation:

In the general rule section 117(d)(1), it should be noted that when calculating the gross income, the reduction in tuition isn't included.

Based on the above reasoning, Graham's gross income will not include the $5,000 tuition reduction that was offered by the chemistry department.

Therefore, the amount that Graham must include in his gross income will be $3500.