Q. Do I remove the 1099-Q data from mine and renter it in hers, including other expenses?
A. You do not need to remove the 1099-Q, from your return. Because you identified the student as the recipient, TT does not enter anything about the 1099-Q on your return. It calculates the taxable amount and advises you to enter it on the student's return. This will provide you a double check when you do enter it on her return.
Q. Do I enter the 1099-Q in hers, including other expenses?
A. Yes. Since she is the recipient, any taxable amount gets reported on her return.
Q. Doing so appears that I must recreate the 1098-T in her return which I doubt is the correct approach.
A. It is OK to enter the 1098-T on both returns. On your return, to claim the tuition credit and on her return to calculate and report the taxable portion (if any) of the 1099-Q. In her interview, you should reach a screen titled “Amount Used to Calculate Education Deduction or Credit”, verify the amount you used, on your return (usually $4000), or change it. If you are not eligible for the credit, the amount should be 0.
The calculations are complicated and TT doesn't always get it right. It pays to have an idea of what the output will be. See example in my other reply. For more specific help, provide the info listed in my other reply.
