Q. Where do I put the taxable scholarship?
A. You have to enter the scholarship in the 1098-T section, when doing the student's return. You cannot enter the 1098-T, as is, since you know the $7110 amount in box 1 is probably erroneous (again, you should verify). You're going to have to make some adjustments.
The simplest way to do it is enter the 1098-T with 0 in box one and the manually calculated taxable amount in box 5. If asked if any was used for room and board, answer yes. Then enter the amount you want to be taxable, in the pop up box. R&B are not "qualified educational expenses". So, this is how you tell TT that it is taxable. Note the wording at that screen “or other expenses”. You didn’t have to literally use the scholarship for R&B. This will put it on line 8r of Schedule 1, where TT will treat it as "hybrid" income.
