Thank you for the reply! I went ahead and deleted this dependent (D2) and started over to re-enter all her data as noted above.
1. I entered into my TT and am using the full LLC credit of $2000 for my other dependent (D1), so no education credit for this dependent (D2). (4 years of AOTC previously used, and actual expenses are less than the amount taken out of 529 due to intentional extra withdrawal to equal one semester of scholarship).
2. No taxable scholarship income.
3.The program is confusing when you have 2 dependents so I saw that it originally tried to take just under 2k from my D1 for LLC (instead of the 2k i wanted it to take), and then a small amount for D2. So I was able to 'fix' it to just use the full 2k from D1. Result is the same as far as LLC credit of 2k, but doing it this way reduces the reportable income of D2 to the $3341 I originally posted.
4. So D2's $3341 is unearned income, thank you.
5. I did misunderstand what form 8615 was asking on D2s taxes, so I've filled that in and now the tax went up for $298 to $379, presumably due to kiddie tax? However I thought the kiddie tax calculation was more complicated, but TT didn't ask for any other information. For example, if some of the info from line 15 1040 is from dividends/interest, does it change the calculation?
Thanks again!
