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The scholarship or fellowship grant should be one that may qualify as a tax-free scholarship underneath the foundations mentioned in chapter 1. Also, the scholarship or fellowship grant must be one that may (by its phrases) be used for nonqualified expenses. Finally, the quantity of the scholarship or fellowship grant that is utilized to nonqualified expenses cannot exceed the amount of the student’s precise nonqualified expenses which can be paid in the tax year. This amount could differ from the scholar’s residing bills estimated by the student’s school in figuring the official value of attendance underneath pupil support guidelines.
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