Q. Is there another way to try this?
A. Yes.
You're getting bogged down in entry details and it messing things up. Your chances of getting TT to do this right in the standard interview are slim. You need to use a short cut. This thread is long and convoluted and I'm involved in several others, so I don't have all your details sorted out in my head. But, I think this is where we are:
It can be simplified, because you appear to have the bottom line numbers.
-You have $3428 of adjusted qualified expenses for the AOTC
-The student needs to report $4350 of taxable scholarship, if he is even going to file
Delete everything, in the 1098-T sections, on both your return and the student's return. On your return, re-enter the 1098-T with $3428 in box 1 and box 5 blank. Re-enter the 1098-T, on the student's return with $4350 in box 5 and 0 in box 1. Enter no other numbers.
