The taxpayer is a Ph.D. student in accounting at City University. The student is paid $1,500 per month for teaching two classes. The total amount received for the year is $13,500.
a. The $13,500 is excludable if the money is used to pay for tuition and books.
b. The $13,500 is taxable compensation.
c. The $13,500 is considered a scholarship and, therefore, is excluded.
d. The $13,500 is excluded because the total amount received for the year is less than her standard deduction and personal exemption.
e. None of these.
Answer: b The $13,500 is taxable compensation.