@NCperson
Thank you again for your consideration on this.
Number 1 did occur. But we have no room and board so #4 is moot.
It sounds like this is still a concept of 'shifting' dollars around to cover both the AOTC 4k qualification on my return and the sheltering of unearned interest on my daughters return. You are just suggesting using expenses (in this case room and board) that are not shown on the 1098-T instead of tuition to accomplish that 'shifting'....but they are both still just 'qualified expenses' (and the question of whether such shifting is allowable is still at large). And even if we had room and board, I still see no place to enter that into TurboTax.
Since I can't do #4 anyway, I'm back to needing to try to find some way to mechanically do this on the forms (and figure out if this is appropriate). At best, this is apparently an 'edge case' that the TurboTax UI can't handle. If there is a 'hack', meaning a way to go in and adjust the forms manually, I'd like to find that.
I'm not sure I like the idea of just 'not including' a form as that sounds like a red flag to me.
Even if I can find a way to shift some of the qualified 1098T tuition to my daughters return she still has maybe around $2500 of unearned interest, with an approximate $500 tax and penalty.
If I take this into a tax preparer they are going to charge me at least $400 (around here)...so its about a wash as far as 'net' taxes and costs are concerned (I'm down 900'ish now...would still be down 500 + 400 to a tax person). So if I can't get a cheap answer on this I'll just keep it as it is. But I think it's pretty crappy. We clearly owe more taxes than we thought...and that seems to be the 'cost' of using the AOTC in some cases.
The concise (albeit wordy) questions I'd like answers to:
1) When claiming the Federal American Opportunity Tax Credit (AOTC) based on a dependents qualified 1098-T tuition, can remaining 1098-T tuition amounts in excess of the $4000 required to get the AOTC credit be shifted to the dependents return to be used as an offset against unearned income resulting from a 529 distribution (1099-Q Box 2 earnings), where the 1009-Q was issued to the dependent with their SS# ?
2) If such shifting of tuition costs between forms as described in #1 is allowable under IRS guidelines, is there a way to enter this scenario into TurboTax 2019 via the TurboTax walk-through interface, and if not via the interface, are there manual form level adjustments that can be made to accomplish this?
I will consult with a CPA and post back here what they tell me so hopefully there is clarity for all.
Thanks to everyone who tried to help on this.
