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To: AppyPappy
I am by no means a CPA, but I am a businessman...

My general understanding about the current tax code is that if you receive, income, revenue, or money from whatever source, there is a very strong potential that with a few exceptions, that money is subject to taxation. It could be taxed as income, taxed as a gift if it meets the criteria, or taxed under an array other taxable attachments that are built into the current tax code. If you are really playing it straight under the code, and someone “gives you money” or pays bills for you, like grandparents paying for children’s tuition for private schools, etc... without the anticipation of being repaid, I think you might have to call that income, at worst, a gift at best.... I believe that you have a taxable event, especially if its a large amount of money provided to you over an extended period of time...

So, with that said, we need a good CPA to inform us as to how the amount of money being paid by anyone, for which the Frosts experience benefit for example in tuition offset or payment on behalf of the Frosts, is handled under the tax code...

After all, if they are receiving tens of thousands of dollars each year in tuition assistance from let’s say grandparents, is that money received each year required to be(1) included in their tax filings as additional income, (2) added to their income considered in their qualification requirements under the program?

Look I don’t want any ill will to come to these nice people, all I want is the truth to prevail in this process. If they are cutting corners anywhere, especially since they have chosen voluntarily to enter the public discourse using “their situation" to make a statement about policy that effects all of us, they are not exempt from being held accountable if it is found they should be...

Is there a CPA that can answer these questions for us?

149 posted on 10/13/2007 4:45:11 PM PDT by SterlingSilver (If it walks like a duck, looks like a duck and quacks like a duck... its a duck!)
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To: SterlingSilver
Late to this thread. I am a CPA, no longer in public practice, and never a tax accountant. So take this a whatever value you want.

But as I understand it, the scholarships are not income, as long as the dollars are never received directly by the taxpayer. The private school tuition is not deductible (at least for Federal taxes, don’t know about MD). And if the school charges you a rate different than what others pay, that is not income to you.

Even if the grandparents are paying the full tuition, I don’t believe that you have a taxable event for the parents, as long as the payment was made to the school and not to the parents.

158 posted on 10/25/2007 12:59:35 PM PDT by MTinMN
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