Answer:
Hope's gross income = $5000 + $10,000 = $15,000
Explanation:
First, we need to highlight what are qualified education expenses especially for tax-free fellowships and scholarships.
Specifically, the qualified expenses that will be tax exempt will be
The tuition and fees which are requirements to go to an eligible school or institution
Other course related expenses required for courses in such institutions such as books equipment and supplies are also tax exempt.
<u>However, room and board, research travel and other expenses that are not required for courses in the institution are not tax free</u>
Based on this analysis:
Hope's initial earning on campus = $5000
However, $10,000 spent on room and board are not required for enrolment in the school, hence, it will be added to the earnings to make the gross income
Hope's gross income = $5000 + $10,000 = $15,000
