Q. We enter $9850 on her 1099-Q, not the full $14,500? And adjust the basis (box 3) and earnings (box 2) proportionally ?
A. No. You enter the full $14,500 on her 1099-Q And the full $5300 for box 2 and $9200 box 3. You let TT do the calculation.
Q. I entered $4000 expenses on my taxes for 1098-T so shouldn't she enter $4100 tuition on hers so as to not count the $4000 expense twice?
A. No.
Q. Or am I'm wrong because of this statement? => Also enter the $5250 (1250 + 4000) in the box "Tax-free assistance"
A. Yes
"I might try this first to see if it works."
Normally, you enter everything exactly as is. In particular, be on the lookout for a screen “education expenses used for a tax credit”. It will usually be prepopulated (sometimes with $10K instead of the more appropriate $4K). Some users are saying they're not getting that screen. You situation is further complicated by the 2nd 1099-Q. Just Don't do it.
