“How does the IRS handle a $40k scholarship?”
“the family paid a lower tuition amount at the exclusive Park school due to financial aid. This does not change the fact they are still paying for private school, just at a lower rate, while others are paying for their kids health care costs.”
So is the scholarship considered income?
Yes, but does the IRS look at the scholarship as INCOME somehow or is it ignored?
The Grandparents took a deduction for their ‘gift’ to charity.
Right??
If the grandparents gave or paid for the kids, I suspect that would be taxable income for the Frosts.
But the way they have it setup is they get the kids in school, keep the family income down and grandparents get a deduction. Wink wink, nod nod.