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.
Fully deductible interest on up to two residences if acquisition debt secured by a home is $1 million or less, and home equity debt is $100,000 or less.