Stipend of Doctoral Student Includible in Income and Subject to Self-Employment Tax.

In this case, a doctoral student received a fellowship grant which paid his tuition and fees and provided an additional cash stipend.  IRS awarded a grant to the company of the student's father which paid the student to conduct grant-related research.  The company issued the student a 1099-Misc., but he only reported the amount not used to pay off student loans and other related education expenses.  The student also did not report the income as subject to self-employment tax.  The court determined that the student failed to substantiate the additional education expenses that he claimed were paid with the stipend from the company.  The court also determined that the student was engaged in the trade or business of medical research as an independent contractor of the company and, as a result, the full payment received from the company was subject to self-employment tax.  Wang v. Comr., T.C. Sum. Op., 2014-39.

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