Yes, making that entry at Student Info Wks, Part VI, Line 18, Column 1 "Used for Credit" is another way to do it. It may even be better in that you don't have to "manipulate" the numbers.
Q. Should I get hit with a 10% penalty?
A. No. TT is doing it correct since that 4K is QHEE that is just being used on his return for the AOTC (a penalty exception).
