@Carl - Welcome to the party!
Like NC said, we both had the 529's go to the school (at least I know mine did). So the 1099-Q is my daughters. And Turbo Tax is charging her Income Tax on the earned portion of the 1099Q because I entered the 1098-T on my return....and there is a portion that is 'stranded there'....ie the excessive of the 1098 qualifying tuition over the $4000 to get the AOTC. There are a LOT of little hints in the language and on the forms about 'double dipping' and 'exceptions' that give rise to these notions of 'transferring' those stranded $ back to the students form to cover the earnings on the 1099.
Would you care to answer my 'one simple question':
**Can i enter a 1099Q line 2c "Adjusted Qualified Higher Education Expenses applied" amount on my daughters federal return to 'transfer' the amount of 1098-T qualified expenses entered (on my/parent return) and 'stranded' (i.e. in excess of the $4000 AOTC qualification)...plus other qualified costs, such as books, Room and Board, etc.
