Thank you. That was exactly what I needed to know.
I hope you can verify one other thing that has been perplexing me. I'm paying all tuition, fees, room and board, minus a $7,500 scholarship, through a 529 distribution. This leaves no money to claim the American Opportunity Tax Credit. However, I verified from the school that there is no stipulation that this scholarship be used on tuition. So, in TT I assigned a portion of the scholarship to room and board. After assigning about $4,000 (not exactly because I had some small expenses not paid by the 529 distribution) TT told me I could get the AOTC credit. I then went into my daughters return and filled in the 1098-T information. On her return the now taxable scholarship is treated as ordinary income and her standard deduction covers the entire amount. Is all of the above Kosher?
Thanks again for your help.
