Treatment of 1099 for Student

[tpert]

I apologize for this being a basic question but I have never seen this before.

Taxpayer (a student) received a 1099 for $5,000 of other income.

Discussions with student indicate that $1000 was a scholarship for academic achievement and $4,000 was a stipend for some summer coursework he completed.

I believe that this is all taxable or at least can all be treated as taxable income.

My understanding is that scholarship money can be treated as earned income on line 7, but that the stipend would not.

Would you put $1,000 on line 7 and $4,000 on line 21? Since this is a dependent, reporting $1,000 as earned income would reduce his tax liability by $100.

I suspect that the scholarship could possibly be considered as nontaxable if used for tuition, but then it would reduce the amount eligible on the parents' return for the AOC credit and cost more overall.

Has anyone ever seen this before? What are the options I have for handling this?

[DONNA ASTON]

report on line 7 taxable scholarship not shown on W-2, not subject to self employment tax. I have one sitting on my desk for a CA student 1099misc other income 3,250 stipend for food and dorm.

[DONNA ASTON]

the stipend is for food/dorm but in exchange for services as a RA. It is earned income and a scholarship that is not used for tutition and gets reported on line 7 IS classed as earned encome
.

[Gary2]

Taxpayer (a student) received a 1099 for $5,000 of other income.

Discussions with student indicate that $1000 was a scholarship for academic achievement and $4,000 was a stipend for some summer coursework he completed.
...
My understanding is that scholarship money can be treated as earned income on line 7, but that the stipend would not.

Would you put $1,000 on line 7 and $4,000 on line 21? Since this is a dependent, reporting $1,000 as earned income would reduce his tax liability by $100.

I wonder if it could even be the other way around. A stipend does seem to be a form of fellowship, which would be tax free if the other requirements are met, and earned income otherwise.

But I question when an amount for academic achievement would be considered a prize and not a scholarship? I think there has to be some sort of connection for it to be a scholarship, either because the student applied for it or becomes eligible through enrollment in a particular program or school. Something like the Nobel Prize couldn't be converted to earned income just because the recipient decides to use the funds to enroll in a degree program.

[DONNA ASTON]

Gary: Given my situation and his same form 1099misc other income how and where on the tax return would you enter. In my situation line 21 triggers "kiddie tax" form 8615 unearned income because over $1,900. I do no it is not subject to fica tax.

[DONNA ASTON]

sorry I did assume that tpert 1099 was in box 3. tpert is 1099misc box 3