Q. Does this seem like a good way to handle it?
A. No. That will enter it as wages. Wage and scholarship both go on line 1 of form 1040, but scholarship gets a notation (SCH####) on the dotted line. Reporting wages that haven't been subjected to social security and Medicare tax is a red flag. On the other hand, since you are mailing the form, you could add that notation by by hand SCH#### (#### is the amount of the taxable scholarship/stipend.
Enter the 1098-T with the stipend in box 5. Later answer that that amount was used for room and board (so that TT doesn't apply it to tuition and fees)
