Q. Does that mean we can't put her books on the QEE since they're included in the $3011 on the 1098?
A. Yes, you can't enter them again, since they are already being claimed as part of the box 1 amount.
Q. It seems like we can only include books and material we paid for from Amazon and her laptop, correct?
A. Yes, those can be added under books not required to be purchased from the school.
That's still not going to be enough to get any AOTC, unless you declare some of his scholarship as taxable (the loop hole).
The IRS actually encourages use of this technique. From the form 1040 instructions: “You may be able to increase an education credit if the student chooses to include all or part of a Pell grant or certain other scholarships or fellowships in income. For more information, see Pub. 970, the instructions for Form 1040 and IRS.gov/EdCredit". PUB 970 even has examples of how to do the “loop hole”.
