Members of the Maryland Association of Certified Public...

Tax answers

March 15, 1996

Members of the Maryland Association of Certified Public Accountants are answering readers' tax questions through April 15.

Q: What are the rules on scholarships? Are they taxable? Does the student have to file a return even though he is still a dependent?

A: Qualified scholarships to cover the costs of education, such as tuition, room and board, books, etc., are excludable from gross income and do not constitute support for the purposes of hTC determining the availability of the dependency deduction. Scholarships, therefore, have no effect on the determination of the students filing requirements. Generally, scholarships are not taxable.

Q: In 1995 I sold my mobile home. Do I have to report a capital gain on my 1995 return, or do I have to a two-year period?

A: If the mobile home was your principal residence, you would qualify for the two-year rollover provisions. You will need to file Form 2119 "Sale of Your Home" and attach it to your 1995 tax return. If it was not your principal residence and was not used in a trade or business, you would report the gain on your 1995

Form 1040 Schedule D, capital gains and losses.

The above advice is for general purposes only and is not intended as legal, accounting or tax advice. Specific situations may vary.

A joint service from The Sun and the Maryland Association of Certified Public Accountants can help you with your tax queries. Association members, all CPAs, will answer questions from readers until April 15. To ask a tax question, call Sundial, The Sun's telephone information service, at (410) 783-1800. Using a touch-tone phone, enter 6225 after you hear the greeting.

Callers are asked to leave their names and phone numbers, should questions need to be clarified. Selected questions will be answered in the Business section. No questions will be answered by phone. Names and numbers will not be published.

Pub Date: 3/15/96

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