Q. Do I need to fill out form 2120?
A. No. Form 2120, Multiple support declaration, is not applicable when it is the student-dependent who is providing some of her own support.
If the loans are in your name, or you cosigned, then that support is considered as coming from you.
A student away at school, is considered to only be temporarily away, and is still living with you for the dependent residence and support rules.
The support value of the home, provided by the parent, is the fair market rental value of the home plus utilities & other expenses divided by the number of occupants.
The IRS has a worksheet that can be used to help with the support calculation. See: http://apps.irs.gov/app/vita/content/globalmedia/teacher/worksheet_for_determining_support_4012.pdf
Most people still claim their child, as a dependent, in your situation.
Be advised, you daughter will not be eligible for the refundable portion of the American Opportunity Credit if she claims herself (this assumes she is unmarried, under 24 and a fulltime student).
