If TurboTax (TT) is saying it's taxable, you've made a mistake in entering info. It's best to just delete the 1099-Q.
You can just not report the 1099-Q, at all, if your student-beneficiary has sufficient educational expenses, including room & board (even if he lives at home) to cover the distribution. When the box 1 amount on form 1099-Q is fully covered by expenses, TurboTax will enter nothing about the 1099-Q on the actual tax forms. But, it will prepare a 1099-Q worksheet for your records. You, and the beneficiary, would still have to do the math to see if there were enough expenses left over for her to claim the tuition credit. The two of you cannot double dip!
On form 1099-Q, instructions to the recipient reads: "Nontaxable distributions from CESAs and QTPs are not required to be reported on your income tax return. You must determine the taxability of any distribution."
That said, and you still want to enter it, it's actually easier, in TT, when the beneficiary is not your dependent. Instead of entering the educational expenses in the education expenses section, you enter it in the 1099-Q section of TT. When asked who is the student, check "someone not listed here". On the next screen, enter the student's name. This will eventually give you one simple screen to enter all expenses. That will get you the TT worksheet, for your file. Nothing about the 1099-Q goes on the actual tax forms, when none of the 1099-Q is taxable.
You should coordinate with your daughter on allocating the expenses. It may actually be better for you to pay some tax, on some of the earnings, so that she can maximize the education credit, on her tax return. The Lifetime Learning Credit (LLC) is worth 20% of tuition paid. Compare that to your tax bracket rate. Grad students are not eligible for the more generous American Opportunity Credit (AOC or AOTC).
