As a parent, it gets easier.
Using the example above, you enter the 1098-T on your return with $4000 in box 1 and box 5 blank. On her return, you enter the 1098-T with box 1 blank and $8000 inbox 5. You don't have to bother with the room and board screen or entering books. The $8000 income will go on line 8r of her Schedule 1.
Theoretically, you can enter all the detailed info and TurboTax (TT) will come to the same conclusion. But, it's gets messy and mistakes are frequent. I highly recommend the short cut. If you do go the hard way, in particular, be on the lookout, on the student return for a box "amount used to claim the credit" (on the parent return). Be sure that's $4000.
Is it OK not to enter the 1098-T exactly as received? Yes.
The 1098-T is only an informational document. The numbers on it are not required to be entered onto your tax return. However receipt of a 1098-T frequently means you are either eligible for a tuition credit or possibly your student has taxable scholarship income.
If you claim the tuition credit, you do need to report that you got one or that you qualify for an exception. TurboTax will handle this.
You claim the tuition credit, or report scholarship income, based on your own financial records, not the 1098-T. If you find it easier, just change the numbers in boxes 1& 5 to what your records show. The 1098-T that you enter in TT is not sent to the IRS.
