taxable scholarships

[taxcouple]

I believe I have a decent handle on the taxation of scholarships, but have seen some excerpts on college athletic scholarships that have raised some questions. Specifically, some excerpts seem to indicate that athletic scholarships are not taxed, no matter what college costs they are used to pay for.

I thought scholarship funds used for non-qualifying education expenses (such as room & board) were taxable, whether from an athletic scholarship or not. However, I would assume that some athletes may not have the means to pay income tax on any scholarship funds used for non-qualifying education costs that exceed their standard deduction. I would think this scenario might come up for many elite athletes on a full ride scholarship.

I would appreciate any thoughts on this topic. If there is an exemption for athletic scholarships, would the same reasoning also apply for other types of students receiving a 'full ride' from their college?

[Davc]

Athletic scholarships are taxable unless spent on the same type of qualifying expenses as other scholarships. They already get a break buy not having the money treated as 100% taxable fellowship. See Pub 970.