$6513 + 600 = $7113 Qualified expenses. $8950 - 7113 = $1837 taxable scholarship before parent claims AOC. $1837 + $4000 = $5837 amount of taxable scholarship with parent claiming maximum AOC. Claiming only $2000 of tuition (instead of $4000) for the AOC is an option and reduces the AOC by only $500.
See your other post for how to use short cuts to enter. Below is the long and complicated "correct" way.
You can both use the 1098-T to enter the expenses.
On your return, enter the 1098-T as received. Later you will be asked how much of the scholarship was used for room & board. Enter $5837 (or 3837 for reduced AOC). Note the wording at that screen “or other expenses”. You didn’t have to literally use the scholarship for R&B.
Enter the 1098-T, exactly as received, on the student's return. Enter book expenses separately (include computer cost with books). In her interview, you should eventually reach a screen called "Amount used to calculate education deduction or credit" Be sure the amount in that box is $4000 (or $2000). That will put all her excess scholarship as income on her return.
Be advised, last year, some people were saying they're not getting the "Amount used to claim the tuition deduction or credit" screen on the dependent’s interview. Check the student information work sheet (part VI, line 17) to verify it was entered. If not, the alternate workaround is to enter the taxable scholarship at the amount used for room and board screen. Do not enter amounts at both the "Amount used to claim the tuition deduction or credit" screen and the "amount used for room and board" screen.
