the k-1 shows income to the beneficiary....the school is not a beneficiary of the trust so there is no distribution to the school....the school got the income plus principal from the trust for tuition but trusts cannot deduct tuition as an expense.
No. You DO enter the 1098-T and claim the tuition credit for the amount paid. It does not matter that the money came from a trust. You claim the credit based on the 1098-T and/or the schools billing statements. The K-1 is irrelevant, for purposes of the education credit. This assumes your daughter is your dependent.
The K-1 is entered, in TurboTax, to report the earnings income, on your tax return (or your child's tax return, if the K-1 is under her SS#).