I get your argument, but I'm still not sure that it is correct. Here is what Pub 970 says. (I've seen similar argument you've had with Ch 35 and the monthly stipend they pay on that one, KrisD15 disagreed and it appears Turbo Tax expert approved her answer there). Thank you for your response by the way, I do appreciate it. I'm just trying to find the correct story here.
https://ttlc.intuit.com/community/college-education/discussion/dependents-educational-assistance/00/...
"If you qualify for one or more of the education tax benefits discussed in Publication 970, Tax Benefits for Education, chapters 2 through 12, you may have to reduce the amount of education expenses qualifying for a specific tax benefit by part or all of your VA payments. This applies only to the part of your VA payments that is required to be used for education expenses."
The book stipend is not "required" to be used for education expenses, however it is earmarked for education expenses. As I said, if you have no book expenses, you can use the money to buy a dog or a car or anything. Just like the BAH expenses or Ch 35 monthly payment.
