What to do with Form 1098-T for dependent "other relative" in my tax filing?

Our daughter qualifies as "dependent other relative". She had no income for last year. She is a full time student at USC (California). She received student loan (box 2: $33,786.00 the "Tuition Statement", Form 1098-T).
Questions:
1. Does she have to file her federal income tax return?
2. What do I do with the Form 1098-T? Do I enter it as my income/expense - and where? (I am using TurboTax.)  (Before this statement, it was clear that we can include her in our tax filing.)

This seems to me a very complicated situation but probably not so much for someone who is an expert in tax filing.

Thank you very much,

Laszlo.
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    If your daughter can be your dependent, you claim the educational credits on your tax return.

    Also, you do not enter your daugher as  "other relative", you enter her as your child, full-time student, and did not support herself.  You say she lived with you all year since time away for school counts as time lived with you.


    If she had no income then she does not need to file.

    • She is Öther relative" because she is 28 years old. Does this change the situation? Thanks.
    • Yes it does, if the student loan in in her name and she is responsible for paying it back, then it counts toward support for the support test for a "qualifying relative" dependent.  You need to figure if you are paying more than 1/2 of here total support for the year.

      See support test in Pub 17 "Support Test (To Be a Qualifying Relative) " To see if you are paying more than 1/2 of her total support for the year.
      http://www.irs.gov/publications/p17/ch03.html#en_US_2012_publink1000170967

      "Example 2.

      Your niece takes out a student loan of $2,500 and uses it to pay her college tuition. She is personally responsible for the loan. You provide $2,000 toward her total support. You cannot claim an exemption for her because you provide less than half of her support."
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