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 TT) will enter nothing about the 1099-Q on the actual tax forms. But, it will prepare a 1099-Q worksheet for your records.
It sounds like you really want that work sheet, even though you don't need it. You own records will suffice in case of an IRS inquiry. It happened to me. I just sent them my billing statements and that took care of it.
If you haven't got TT to do it right yet, you never will in the standard interview. Here's the work around:
Delete the 1099-Q and 1098-T, you already entered.
The workaround is: Enter the 1099-Q. When asked who is the student, check "someone else not listed here" (Lying to TurboTax to get it to do what you want does not constitute lying to the IRS). On the next screen, enter the real student's name. This will eventually give you one simple screen to enter all expenses. Press Done at the 1099-Q summary screen, to get there.
