🚀 go-pugleaf

In article <michaelg.758394756@Xenon.Stanford.EDU>, Michael Greenwald wrote:
>gjohn@ostrich.Stanford.EDU (George John) writes:
>
>>   * The amount of the stipend which is not used for books/tuition is
>>     federally taxable

According to IRC sec. 117 the following are exempt.
"tuition .. fees, books, supplies and equipment required for courses of
instruction at ..."

>
>>   * but the total amount (regardless of what it's used for)
>>     is exempt from state taxes
>
>>A couple of people responded with helpful information.  One person
>>confirmed points 1 and 2 above, and I just called the CA franchise tax
>>board (800-852-5711) to make sure of #2.

>Is this authoratative in any way?

Technically no.  But (IMO) CA Franchise Tax answer California income
tax and procedure questions correctly [That's my experience].
I don't understand the answer.  Is there something special about NSF
fellowships that make them different than Scholarships that are partially
exempt under IRC sec 117?

> I've _always_ been told that
>fellowships were taxable by California, and have been paying taxes
>(including estimated :-() for 4 years now.  I'd be very happy to learn
>that I was wrong.

No.  In my Opinion YOU are correct.  I don't have the current California
Revenue and Taxation Code at home, so I can't do the statutory
constructions to prove you are correct.  However, I can support this
opinion with the following.

FTB Pub. 1001 "Supplemental Guidelines to California Adjustments" doesn't
mention it.

The 1992 tax year "Guidebook to California Taxes" by Bock, section 226
appears to say that Federal and State Law are the Same (if it's not a
Christa McAuliffe Fellowship received before 7/1/90).

I have not found this adjustment in "The Manual of California Taxes"
(including the 1993 supplement) by Kathleen K. Wright and Richard J.
Ayoob.

>Assuming that they aren't taxable, can I then file amended returns for
>89-92? (I bet I don't get interest, do I?)

If they weren't taxable you could file those amended returns.
[The 1989 California return would have to be filed before 4/15/94.]
No interest would be paid.

>
Additional comments:

  Page 502-504 of "1992 Tax Guide for College Teachers" by Berstein
only the portion attributable to teaching/research, IF ANY, would be
subject to Social Security Tax.

  I will look into George John's questions a bit more when I get to a
library.  I don't understand why my OPINION could be correct and the
original poster received the answer from the FTB he did.

Frank



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| Frank McNeil        | The Foolish man doesn't learn from his mistakes. |
| ftmexpat@crl.com    | The Average man learns from his mistakes.        |
| Tax Code Junkie     | The Wise man learns from other peoples mistakes. |
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