Scholarships that add up to more than tuition and fees-room and board included

[tsuewalker]

Client has a 1098T that shows 1902.10 for tuition and qualified expsenses. (This does not include a required computer, software, books, etc) that was paid for by the client herself). She also took a college course while still in high school that was pd for by client. In box 5 the amount of scholarships is 3757.50. A portion of the scholarship funds was used for room and board. The college she attended paid for 1/2 of the room $(537.50) and board ($637.50) and the BIA (Cherokees) covered the other 1/2 of the room and board. Everything I have read during my research says that room and board paid by scholarship must be counted as income. Am I correct? If I am correct, I believe that this must be included on line 7. If I could get some input, I'd appreciate it very much. I just want the return to be right! Thanks for your help in advance! I appreciate it so much!
tsw

[DonB]

If those a part of the scholarship funds were "required" to be used for room and board, they would not qualify as educational expenses as per TTB. Were they required to be used for R&B?

[DonB]

See TTB page 12-9 for a worksheet.

[tsuewalker]

I should have been more clear about what I was talking about!

Client is the mother of student that receives this 1098T. She claims her daughter as a dependent. Her daughter who is a freshman is on a softball scholarhip that is away from her home and requires room and board as she has school and practice everyday. The daughter's 1098T shows 1902 for tuition and she received scholarships from the college in the amount of $3758. She also received from Bureau of Indian Affairs $1275 (paid straight to bursar for room and board only) for 1/2 of her room and board. College paid for other 1/2 of her room and board (same amount) that I assume is included in the 1098T from the college. Received nothing from the BIA showing what they paid. On 12-7 it states that Scholarship and Fellowship Payments for Degree Candidates is tax free if used for tuition and fees/books/supplies/equipment are tax free. It shows in that table that room and board is taxable.

I'm a little confused as to how to treat scholarships and then the other items that were required for the courses, such as a computer and software, I'm not sure where to put those.

I appreciate any help I can get. Thank you in advance.

[Lion]

Use the actual costs the mother/client paid; get an accounting from the bursar's office. Taxable scholarship excess goes on the daughter's/student's return line 7, I think, with SCH or something similar in the margin. TTB gives some good explanations and examples. Mother/client will not have any education benefits if everything was paid for.