I have the same sort of issue. Part of my QTP is being reflected as taxable, even though the entire amount was paid to the school for eligible expenses.
When I look at the form itself, under Qualified Tuition Program (QTP) Computation of Taxable Income, the line 2c "adjusted qualified higher education expenses" are $5,000 less than the total distribution (line 1) as reflected in by 1099 Q. I also entered a $5,000 scholarship as reported on the 1098 T for my son. I adjusted the expenses upward when entering the 1098 T to reflect the actual eligible expenses paid beyond wht was reported by the college, but it's not adjusting the expenses on this form.
I suppose I can just remove the 1099 Q from his return based upon prior advice from the site. It just seems strange that I can't adjust Turbo Tax to reflect the actual situation.
