@Hal_AI, I really appreciate the detailed answer.
I would love to be able to reserve $4K to claim against the American Opportunity Credit. That is what I was trying to do. But TurboTax won't let me.
As an aside, I received the 1099-Q directly, since the tuition money went through me. So we can ignore all that potential complexity.
I experimented will all sorts of data input sequences. Ultimately, reducing the room and board expenses allowed me to get to that override screen, and ultimately, save me $1K on my tax bill via the American Opportunity Credit. Not intuitive and not the way the program should work.
I really don't understand what is going on here, and I hope that TurboTax is generating correct output. I guess I'm comforted by the fact that if the IRS questions me about it, I can pull out proof of several thousand more dollars in room & board to offset anything they might complain about.
