Ok ... yes she will be a dependent up until the age of 24 if she is still in school. As for the 529 plan withdrawls ... they should be done in her name up to the standard deduction for the year. For instance if she takes out $12K then the same amount of the scholarship will be taxable on her return however she will owe no taxes or penalties. You can do this every year she is in college to drain the account tax free.
