The Taxpayer is saying that he has more scholarship than tuition paid on his 1098-T.
Let say 4,000 tuition, 5,000 scholarship.
He is saying he expects to pay tax on the net difference (1,000) but he says he is paying the entire scholarship amount (5000)
Yes, that is possible if the parents took 4,000 expenses for the American Opportunity Tax Credit, the student needs to claim the 5,000 scholarship as income. (there are no expenses left to apply to the scholarship)
No, you can't double dip, that's why the parents enter the 1098-T into their program so the program can do the math.
Yes, you can allocate scholarships to tuition (making them tax free) or to other expenses like room and board which means the expenses can be used for a credit and the student claims the scholarship amount used for room and board.
@NCperson
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