1098 forms from two schools, a college and a graduate school where scholarship exceeds tution for Graduate school

[itparent]

My daughter (dependent) graduated bachelors degree from college#1 May last year. She was accepted and is now  taking PHD in another school,college#2.  She  got a 1098E from college#1 loan as well as 1098T  where tuition is more than the scholarship. for PHD college#2, she got 1098T where tution is less than scholarship. I believe that because scholarship exceeds tuition on  college#2 1098t, she needs to report that 1098T on her tax return. But who reports the other 1098T and 1098E?  is it the parent ,or all should should be reported by the student ? Do parent and student need to enter  the two 1098T and one 1098E on both returns in Turbotax?

[KrisD15]

Only your return.

If you are claiming the student as your dependent, you enter all the forms relating to education into your program so that the program can calculate a credit for you and/or any taxable income for the student. 

You claim the loan interest if you paid it. If anyone else paid it, including the student, no one can claim it. 

FOR 2021, you DO NOT need to separate the expenses and payments for the grad and undergrad expenses. 

For 2021, your student is considered still in the first four years of the degree even though she started grad school in the fall. All the expenses and payments can be lumped together (although you will enter each 1098-t forms)

IF the state in which you file has a credit, they may separate undergrad and grad expenses, depending on the state.  

According to the IRS:

"Example 2. After taking classes at College V on a
part-time basis for a few years, Shelly became a full-time
student for the 2021 spring semester. College V classified
Shelly as a second-semester senior (fourth year) for the
2021 spring semester and as a first-semester graduate
student (fifth year) for the 2021 fall semester. Because
College V didn't classify Shelly as having completed the
first 4 years of postsecondary education as of the beginning of 2021, Shelly is an eligible student for tax year
2021. Therefore, the qualified education expenses paid
for the 2021 spring semester and the 2021 fall semester
are taken into account in figuring the American opportunity credit for 2021."

[itparent]

About 1098T, it seems to be conflicting  with another answer from another question : 

"In the case where scholarships/grants covers “all” qualified education expenses, the parent’s don’t need to report educational information on their dependent student at all – but they still claim the student as a dependent if they “qualify” to claim the student.

 If the scholarships/grants exceed the qualified education expenses, then the student will report the 1098-T and all other educational expenses and scholarships/grants on the student’s tax return. The student will pay taxes on the amount of scholarships/grants that are not used for qualified education expenses. "

so even if College#2 1098T satisfies criteria above but College#1 does, both 1098T can be reported alone  under the parents's return ?

[Hal_Al]

College 2 scholarship can be counted against college 1 expenses, since they both occurred in the same year.  I think  @KrisD15  means the same thing when he said "FOR 2021, you DO NOT need to separate the expenses and payments for the grad and undergrad expenses."

So, how you report it depends on the numbers.  You can do both: you can claim  the education credit* and the student report excess scholarship as income.  The student can even report more of the scholarship taxable on her return, in order to free up more tuition for the credit on your return. 

*If the student received a bachelors decree, this is probably the 5th calendar year in school. You may have already claimed the American Opportunity Credit (AOC) the maximum 4 times.  The less generous  Lifetime Learning Credit (LLC) requires $10,000 of expenses to get the maximum $2000 credit (vs $4000 for a $2500 AOC).