If you used all of the proceeds from the 1099-Q to pay for your daughter's tuition and qualified expenses remove the 1099-Q entry from TurboTax completely.
TurboTax is calculating income because it doesn't see associated expense (since she is not a dependent on your return.)
Form 1099-Q is only required to be listed on the tax return when there is taxable income. If the entire amount was used for qualifying expenses, and those same expenses are not being claimed on your daughter's returns for education credits, then there is no need to report the distribution on your tax return.
Keep in mind that the distributions from education savings plans reported on 1099-Q may be used for a greater number of "qualifying expenses" than those that are used to calculate the credit that my be claimed on the student's own return. (It is not limited to only tuition, fees, and books.)
For more information, you may wish to see IRS Publication 970.
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