Q. So, if my daughter's scholarship is $15,000, she can file her own taxes and would report $11,000 as income and we could take the $4,000 tuition credit?
A. Yes, that's fundamentally the answer. But your numbers may not be right.*
Q. If so, do we still report the 1098-T?
A. Yes, you must report that she got a 1098-T to qualify for the credit.
*It's not clear if the $15,000 private scholarship is included in the 51,460 shown in box 5 of the 1098-T. Is so, your numbers are 51,460 - 40,515 = $10,945 of her scholarship is already taxable. If you claim $4000 for the AOTC, her taxable amount becomes $14,945.
If the $15K, is not included in box 5, why not? What is the source of the money? Gift money is not a scholarship and does not need to be accounted for (depending on the source).
