Fellowship payments used for incidental expenses, including room and board, travel, and optional equipment are taxable. So too are amounts received for teaching, research, and other services required as a condition for receiving the fellowship. The only exception: amounts received for services required by the National Health Service Corps Scholarship Program or the Armed Services Professional Scholarship and Financial Assistance Program.
Rules that limit the deduction of losses from passive activities to income from other passive activities. Passive activities include investment rental operations or businesses in which you do not materially participate.