With $8895 in box 1 and $16,912 in box 5, TurboTax (TT) should automatically calculate $8017 as the taxable amount of the scholarship. It should not even be necessary to enter room & board. But, for some reason, that I have never figured out, it doesn't always do it right.
Answering the room & board (R&B) question usually ensures the correct answer (amount of taxable scholarship). You are not really telling TT how much you spent on R&B. You are only telling TT how much of the scholarship is not being allocated to QEE.
Q. What are advantages to saying all $8,017 versus just entering the actual room and board?
A. Getting the results you want: $8017 of the scholarship being taxable so that the parent are justified in claiming $4000 of tuition (QEE) for the AOTC. What you enter does not affect anything else.
