If a Tuition Reduction is Taxable, What’s the Measure of Income?


Erik M. Jensen


This article considers what the measure of income should be if a tuition reduction is taxable, and it challenges the idea that an educational institution’s stated tuition figure should control in that determination. It’s the value of the reduction, not the dollar difference between sticker price and the tuition actually paid by a particular student, that is potentially income, and the article suggests one reasonable method that might be used to determine that value. Although the focus of the article is on tuition reductions, the argument applies just as well to other situations in which a price reduction (or what in form looks like a price reduction) is taxable.


qualified tuition reduction, scholarship, Section 117(d), valuation

Publication Date


Document Type


Publication Information

Journal of Taxation of Investments, Summer 2018, at 63

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COinS Erik M. Jensen Faculty Bio