[Code of Federal Regulations]
[Title 26, Volume 2]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.117-3]

[Page 493-494]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.117-3  Definitions.

    (a) Scholarship. A scholarship generally means an amount paid or 
allowed to, or for the benefit of, a student, whether an undergraduate 
or a graduate, to aid such individual in pursuing his studies. The term 
includes the value of contributed services and accommodations (see 
paragraph (d) of this section) and the amount of tuition, matriculation, 
and other fees which are furnished or remitted to a student to aid him 
in pursuing his studies. The term also includes any amount received in 
the nature of a family allowance as a part of a scholarship. However, 
the term does not include any amount provided by an individual to aid a 
relative, friend, or other individual in pursuing his studies where the 
grantor is motivated by family or philanthropic considerations. If an 
educational institution maintains or participates in a plan whereby the 
tuition of a child of a faculty member of such institution is remitted 
by any other participating educational institution attended by such 
child, the amount of the tuition so remitted shall be considered to be 
an amount received as a scholarship.
    (b) Educational organization. For definition of ``educational 
organization'' paragraphs (a) and (b) of section 117 adopt the 
definition of that term which is prescribed in section 151(e)(4). 
Accordingly, for purposes of section 117 the term ``educational 
organization'' means only an educational organization which normally 
maintains a regular faculty and curriculum and normally has a regularly 
organized body of students in attendance at the place where its 
educational activities are carried on. See section 151(e)(4) and 
regulations thereunder.
    (c) Fellowship grant. A fellowship grant generally means an amount 
paid or allowed to, or for the benefit of, an individual to aid him in 
the pursuit of study or research. The term includes the value of 
contributed services and accommodations (see paragraph (d) of this 
section) and the amount of tuition, matriculation, and other fees which 
are furnished or remitted to an individual to aid him in the pursuit of 
study or research. The term also includes any amount received in the 
nature of a family allowance as a part of a fellowship grant. However, 
the term does not include any amount provided by an individual to aid a 
relative, friend, or other individual in the pursuit of study or 
research where the grantor is motivated by family or philanthropic 
considerations.
    (d) Contributed services and accommodations. The term ``contributed 
services and accommodations'' means such services and accommodations as 
room, board, laundry service, and similar services or accommodations 
which are received by an individual as a part of a scholarship or 
fellowship grant.
    (e) Candidate for a degree. The term ``candidate for a degree'' 
means an individual, whether an undergraduate or a graduate, who is 
pursuing studies or conducting research to meet the requirements for an 
academic or professional degree conferred by colleges or

[[Page 494]]

universities. It is not essential that such study or research be pursued 
or conducted at an educational institution which confers such degrees if 
the purpose thereof is to meet the requirements for a degree of a 
college or university which does confer such degrees. A student who 
receives a scholarship for study at a secondary school or other 
educational institution is considered to be a ``candidate for a 
degree.''

[T.D. 6500, 25 FR 11402, Nov. 26, 1960; 25 FR 14021, Dec. 21, 1960, as 
amended by T.D. 8032, 50 FR 27232, July 2, 1985]