@Hal_Al
Like you indicated, I did the interview for the exception of the 1098-T, since my child did not receive a 1098-T. Now, I'm trying to figure out what numbers to input for tuition and scholarships/grants from the billing statement. My understanding is BOX 5 needs to have the total of all scholarships and grants. BOX 1 the total amount of Qualified Educational Expenses. In our case, BOX 5 is more than BOX 1.
My child received 2 grants.
One grant completely covered his undergraduate tuition.
The other grant is a lesser amount and was applied to the remaining balance of the statement which includes fees, housing, and meal plan. This second grant did not cover the complete bill. We had to pay the remainder out of pocket. (I don't know the terms of the grants received.)
In regards to the scenario you gave: Using an example: Student has $10,000 in box 5 of the 1098-T and $8000 in box 1. At first glance he/she has $2000 of taxable income and nobody can claim the American opportunity credit. But if she reports $6000 as income on her return, the parents can claim $4000 of qualified expenses on their return.
(From where did you get $6,000 as income from this scenario?)
I hope you are able to understand my questions and provide answers. I'm really trying to do what's right and I find this not easy to understand.
Thank you in advance.
