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Yes, the bug prevents me from filing electronically.  It takes my money, and at the very last step says there is an error, fix it to proceed.  There is no way to proceed with the error in place.  I hope this gets fixed soon.  Thank you. 

Q. My question is about the allocation of the $4000 among the two 529s. Are we allowed to choose how it is allocated?  A. Yes, effectively.  Normally, you can allocate expenses anywhere you want. But, that $4000 is not eally  being allocated to 529s. It is being allocated to the American Opportunity Credit (AOC),  being claimed on your return.      Q. TurboTax (desktop) seems to be spreading the $4000 across the two 529s according to the percentages of the expenses that were paid from each source. If we are allowed to change it, how would I get TurboTax to make that change? A. You’ll need to use  workarounds on both returns   On your return, your total expenses entered should be $4000 more than your distribution. When you claim the AOC, the net qualifying expenses will equal your distribution. Nothing is taxable. But, I like @AmyC ’s suggestion better: just don’t enter the 1099-Q since you know it’s not taxable. Just enter the 1098-T to claim the AOC   On her return, you need to allocate enough expenses to her 529 so that the NET total amount allocated is $4000 less than her distribution. But, at the same time you want to claim the penalty exception, for the AOC being claimed on the parent’s return.   So, you’re going to have to make what may appear to be a duplicate  entry of the $4000 (but effectively isn’t). A workaround is needed.   Enter the 1099-Q. When asked who the beneficiary is answer: someone else  (lying to TurboTax to get it to do what you want does not constitute lying to the IRS).  Enter the student's name when asked.  A few screens later, you'll get one simple screen to enter expenses. Press continue at the 1099-Q summary screen, to get the non dependent student summary screen . Click the edit pencil to get the expenses screens. Also enter  $4000 in the box "Tax-free assistance".  This reports a percentage of the  earnings as taxable but claims the tuition credit exception. You do not have to deal with the complicated “Educational expenses and Scholarships” (1098-T) section later. TT will prepare form 5329 to claim the penalty exception.

@gradstudentwq just key in the 1098-T just as it is presented to you.  None of scholarships will be taxable because Box 1 exceeds Box 5.  it's that simple.  do not check that box.   Scholarships are TAXABLE to the student.  Many misunderstand that.  But the IRS permits that scholarship income to be reduced dollar-for-dollar by Qualified Educational Expenses (box 1).    so when TT asks, you have $30,000 of tuition and $25,000 of scholarships.  there should be an Lifetime learning credit of up to $1,000. (20% * $5,000)

You can remove a "Sale of Business Property" that may have been added in error. You can delete your entries for sale of business property by going back to that section in TurboTax. You can review your screens and delete any entries.   You can delete your entries for a sale of business property as follows: Click on the search icon in the upper right of your TurboTax screen Type "sale of business property" in the search box Click on the link "Jump to sale of business property" Follow through your screens and delete any entries you made. If a Form 4797, "Sales of Business Property" was created and remains in your return, you can delete that Form using the following instructions.   If you are using TurboTax Desktop: Click on "Forms" in the upper right corner of your TurboTax screen to switch to Forms Mode In your left panel under "Forms in My Return" Scroll down to "Form 4797 Sales of Business Property" Click on the form and it will display in your right panel In the bottom left of the form in your right panel click on "Delete Form" Select Yes to confirm the deletion If you are using TurboTax Online: Choose Tax Tools option on the left menu bar in the federal section of TurboTax Choose Tools Under Other Helpful Links choose Delete a form Find the Form 4797 Sales of Business Property and click on the option to delete it   See Also: How do I edit or delete the sale of a business property I've already entered (Form 4797)?   If you have additional information or questions regarding this, please return to Community and we would be glad to help.  

We at Intuit TurboTax want our users to be completely delighted with their experience using our products and services, and successful in their financial lives and businesses. Once you file your return, as long as the settings to receive communication from Intuit don’t block it, you will see a pop-up message or receive an email with a survey asking you about your experience. We encourage you to leave your notes and comments there. “Voice of the Customer” notes and comments are read and acted upon.  If you are using TurboTax Desktop, you can also leave feedback at the Final Steps tab.  

I don't see a form 4562, but do see IRC 195 with an exclamation mark. Is this the form to address? There is no delete option on the bottom, but spotted a remove IRC 195 form from the drop down menus at the top of the program. Safe to assume that is what I should do—only remove the IRC 195  through this method?  

Why can't TurboTax present the question in plain English?  What is "a residence of yours"?  Does TT know the difference between "a residence" and "the residence"?  Does it mean the loan can also be secured by other types of things or a non-residence property?   Thanks for posting the answer, nonetheless!😊

The IRS allows various methods to determine your average balance. Either way, the final average balance will determine the deductible interest. The formula is: Deductible Interest = Total Interest Paid times ($750,000 divided by Average Balance)   Here is my easy method - note you can make it more complicated* Interest for short term loan is limited: Deductible % for short term mortgage  $750,000 divided by $775,000} = 96.77% Deductible interest 96.77% times total interest paid Interest on refinanced loan is below the limit and fully deductible. Add the deductible interest for each loan for the total allowed.   *instead of using $775,000 as the average balance - you can refine it with the average balance for each month and divide by 3. It won't be a big change. You can use alternative methods in IRS Pub 936.  To determine your average balance, you need to determine which method you want to use and document your process. The link will show you the options and give examples. You do not qualify for average of first and last balance method or mixed use. This leaves two options.  The interest rate method may be your best bet but check the statements provided by your lender option as well.