My daughter is a full-time college student. I am showing her as a dependent on my returns. She received a 1098-T from her university. Box 1 is about $26K. She got a scholarship (which was used to reduce tuition) and, hence, Box 5 is about $24K. She will be filing her returns as she has income from other sources. Questions:
1. Do I show 1098-T on my returns or hers?
2. When I try to enter the 1098-T on her returns, TurboTax increases her tax liability due to the scholarship? But, shouldn't this scholarship money be non-taxable as it was used to pay for tuition? We never received the money in our hands. The university simply reduced her tuition by the scholarship amount.
