First we need to know your qualified expenses. It appears you had $7000 in tuition and fees and $1400 for books and course materials, I'll assume the other $3600 (12000-7000-1400=3600) was used for room and board.
If you claim the AOC, you use $4000 for the AOC and $8000 for the 1099-Q. 8000/12000 = 67%. 0.67 x 4700 = $3133 of the earnings are tax free. You have $1567 of taxable income (4700-3133).
If you claim the LLC, you use $10,000 for the LLC and $2000 for the 1099-Q. 2000/12000 = 17%. 0.17 x 4700 = $800. You have $3900 of taxable income (4700-800)
You cannot use the AOC or LLC without giving up some of the tax exclusion (benefit) of the 529 plan.
