@NCperson - Thanks for making me look. I didn't realize that this loop hole technique is described in detail (including limitations) on page 16 of PUB 970, and is specific to the AOTC. I think this section of Pub 970 may even be new, this year.
Page 15 (AOTC section) PUB 970 (repeated on pages Page 5, 27 & 41) :
*TIP* "You may be able to increase the combined value
of an education credit if the student includes
some or all of a scholarship or fellowship grant in
income in the year it is received. For examples, see Coordination with Pell grants and other scholarships., later." Details on page 16.
I was where you are, 5 years ago, when a user (not a expert or Champ) here, in the forum, first called me out for telling people they couldn't do it. I couldn't believe the government would be that stupid!
