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Reply to "Unique scholarship question"

An interesting point was made earlier about taxation.  Know that an athletic scholarship will have PORTIONS of it that are taxable, specifically, those benefits that are applied to anything outside of tuition.

Use that information to your advantage.  For example, just assume your son is offered a 50% total cost of attendance scholarship.  If the school utilizes that in a way that it applies all or most of the money toward his dorm and meal plan, then leaves you to pay the tuition (using personal or your GI Bill money), then you're on the hook to claim all of that athletic scholarship and having to pay taxes on it.  If you flip that where his athletic scholarship is applied toward his tuition first, and the balance to non-scholarship (assuming there is some balance), then you'll only need to claim and pay taxes on that portion paid outside of tuition.  Then you can your your tax free GI Bill to pay those items outside of tuition.

Do what you can to educate yourself on the taxation of this and what changes between now and then.  Could be the difference of you having to come out of pocket to IRS each year.

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