(a) Scholarship. A scholarship generally means an amount paid or allowed to, or for the benefit of, a student, whether an undergraduate or a graduate, to aid such individual in pursuing his studies. The term includes the value of contributed services and accommodations (see paragraph (d) of this section) and the amount of tuition, matriculation, and other fees which are furnished or remitted to a student to aid him in pursuing his studies. The term also includes any amount received in the nature of a family allowance as a part of a scholarship. However, the term does not include any amount provided by an individual to aid a relative, friend, or other individual in pursuing his studies where the grantor is motivated by family or philanthropic considerations. If an educational institution maintains or participates in a plan whereby the tuition of a child of a faculty member of such institution is remitted by any other participating educational institution attended by such child, the amount of the tuition so remitted shall be considered to be an amount received as a scholarship.
(b) Educational organization. For definition of “educational organization” paragraphs (a) and (b) of section 117 adopt the definition of that term which is prescribed in section 151(e)(4). Accordingly, for purposes of section 117 the term “educational organization” means only an educational organization which normally maintains a regular faculty and curriculum and normally has a regularly organized body of students in attendance at the place where its educational activities are carried on. See section 151(e)(4) and regulations thereunder.
(c) Fellowship grant. A fellowship grant generally means an amount paid or allowed to, or for the benefit of, an individual to aid him in the pursuit of study or research. The term includes the value of contributed services and accommodations (see paragraph (d) of this section) and the amount of tuition, matriculation, and other fees which are furnished or remitted to an individual to aid him in the pursuit of study or research. The term also includes any amount received in the nature of a family allowance as a part of a fellowship grant. However, the term does not include any amount provided by an individual to aid a relative, friend, or other individual in the pursuit of study or research where the grantor is motivated by family or philanthropic considerations.
(d) Contributed services and accommodations. The term “contributed services and accommodations” means such services and accommodations as room, board, laundry service, and similar services or accommodations which are received by an individual as a part of a scholarship or fellowship grant.
(e) Candidate for a degree. The term “candidate for a degree” means an individual, whether an undergraduate or a graduate, who is pursuing studies or conducting research to meet the requirements for an academic or professional degree conferred by colleges or universities. It is not essential that such study or research be pursued or conducted at an educational institution which confers such degrees if the purpose thereof is to meet the requirements for a degree of a college or university which does confer such degrees. A student who receives a scholarship for study at a secondary school or other educational institution is considered to be a “candidate for a degree.”
[T.D. 6500, 25 FR 11402, Nov. 26, 1960; 25 FR 14021, Dec. 21, 1960, as amended by T.D. 8032, 50 FR 27232, July 2, 1985]
Notes of Decisions
Cited in
94
cases, 1960–1996 · leading case:
Knapp v. Comm'r, 90 T.C. 430 (Tax Ct. 1988).
Knapp v. Comm'r, 90 T.C. 430 (Tax Ct. 1988).
· cites it 18× “Respondent issued a notice of deficiency to petitioners, determining that the $ 8,250 was additional compensation to petitioner.”
Brubakken v. Comm'r, 67 T.C. 249 (Tax Ct. 1976).
· cites it 4× “However, section 1.117-3(a) of the Income Tax Regulations provides that "A scholarship generally means an amount paid or allowed to, or for the benefit of, a student, whether an undergraduate or a graduate, to aid such individual in pursuing his studies.”
Spiegelman v. Comm'r, 102 T.C. 394 (Tax Ct. 1994).
· cites it 6× “, provided, inter alia: Fellowship grants . A fellowship grant generally means an amount paid or allowed to, or for the benefit of, an individual to aid him in the pursuit of study or research.”
Bhalla v. Comm'r, 35 T.C. 13 (Tax Ct. 1960).
· cites it 4× “For example, if all candidates for a particular education degree are required, as a part of their regular course of study, to perform part-time practice teaching services, such services are not regarded as part-time employment for purposes of section 117(b)(1).”
Charles L. Knapp & Beverley E. Knapp v. Comm'r of Internal Revenue, 867 F.2d 749 (2d Cir. 1989).
· cites it 3× “§ 117 and 26 C.F.R. § 1.117-3 (a) (1979); and (ii) because taxes appear never to have been imposed on such payments, the Tax Commissioner was barred from taxing the tuition assistance grants by the “Fringe Benefit Moratorium” enacted by Congress, Act of October 7, 1978, Pub.”
Yarlott v. Comm'r, 78 T.C. 585 (Tax Ct. 1982).
· cites it 4× “, defines "fellowship grant" as an amount "paid or allowed to, or for the benefit of, an individual to aid him in the pursuit of study or research.”
Meehan v. Comm'r, 66 T.C. 794 (Tax Ct. 1976).
· cites it 2× “, "A scholarship generally means an amount paid or allowed to, or for the benefit of, a student, whether an undergraduate or a graduate, to aid such individual in pursuing his studies.”
Bingler v. Johnson, 394 U.S. 741 (1969).
“117-3 (a), (c), 26 CFR §§ 1.117-3 (a), (c), which set out the “normal characteristics” associated with scholarships and fellowships: “§ 1.”
Phillips v. Comm'r, 57 T.C. 420 (Tax Ct. 1971).
· cites it 4× “117-3(a) of the Income Tax Regulations defines the term "scholarship" generally to mean "an amount paid or allowed to, or for the benefit of, a student, whether an undergraduate or a graduate, to aid such individual *16 in pursuing his studies.”
Weinberg v. Comm'r, 64 T.C. 771 (Tax Ct. 1975).
· cites it 2× “Although "scholarship" and "fellowship grant" are not defined in the statute, section 1.117-3(c) of the Income Tax Regulations provides: "A fellowship grant generally means an amount paid or allowed to, or for the benefit of, an individual to aid him in the pursuit of study or…”
Olick v. Comm'r, 73 T.C. 479 (Tax Ct. 1979).
· cites it 2× “The regulations, however, define the term as "an amount paid or allowed to, or for the benefit of, a student * * * to aid such individual in pursuing his studies." Sec. 1.117-3(a), Income Tax Regs.”
Bailey v. Comm'r, 60 T.C. 447 (Tax Ct. 1973).
· cites it 2× “Although the statute fails to define either of the terms "scholarship" or "fellowship grant," section 1.”
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