____ 26. Ron, age 19, is a full-time graduate student at City University. During
ID: 2588166 • Letter: #
Question
____ 26. Ron, age 19, is a full-time graduate student at City University. During 2016, he received the following payments:
State scholarship for ten months (tuition and books)
$ 7,000
Loan from college financial aid office
6,000
Gift from his aunt
3,500
Cash award for being the outstanding resident adviser
2,000
$18,000
Ron served as a resident advisor in a dormitory and, therefore, the university waived the $3,500 charge for the room he occupied. What is Ron’s adjusted gross income for 2016?
a.
$3,500.
b.
$18,000.
c.
$2,000.
d.
$10,500.
e.
None of the above.
State scholarship for ten months (tuition and books)
$ 7,000
Loan from college financial aid office
6,000
Gift from his aunt
3,500
Cash award for being the outstanding resident adviser
2,000
$18,000
Explanation / Answer
Ans. C. $2000
Explanation:
Scholarships for ten months (tuition and books) of $7000 will be excluded from gross income.
Loan from college financial aid office $6000 is not an income.
Gift from Aunt $ 3500 is not an income.
The $2000 award for being the outstanding resident adviser is included in Ron’s gross income.
The $3500 waiver for housing is not included in Ron’s gross income because the housing is provided for the convenience.
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