DD (a junior in high school) took a college course during the fall semester at a local CC. I paid the cost of the course ($315), the cost of the course for students in the early college program. We received a 1098-T that has in box 2 (billed) an amount of $687 and in box 5 (scholarships/grants) an amount of $372. I was surprised to see that. I figured that since the cost was $315, that's what would be in box 2. I didn't realize that they apply the full cost of the course to the student account and then write off an amount as a grant. That is really not the problem, but was a surprise to me.
My question is how to handle this for tax purposes. From what I have gathered through research and reading through IRS Pub. 970, it seems we should be able to claim the Lifetime Learning Credit for the $315 (the actual amount we paid for the course). But if I list the amounts above in TurboTax, it comes up with a message that the amount is taxable to my daughter and she needs to claim it on her taxes (she has no income, earned or unearned, so that wouldn't be the case). I've got my other two kids' 1098-T info included (one for AOTC and one for LLC) which, since I went through the calculations manually before inputting in TT, I know is being calculated correctly. I put DD's in and it doesn't seem to be correct.
I don't know if I'm answering all the interview questions correctly for her situation, and maybe this is where I need guidance. I find some of the interview questions difficult to answer in this situation. She isn't officially enrolled in a degree program, though the course could go towards a degree in the future, nor is she a first-year student (she's in high school). Anyone here have experience with this? Any suggestions on how to properly report this going through TT?
Edited by Nancy in NH, 01 February 2018 - 05:17 PM.