Parent VS dependent: Scholarship and education credit

The scholarship and  Educational expenses for a dependent if claimed by the parent are entered on the educational worksheet on the parents return if child is claimed as dependent, under child's name as it shows dependents name and ssn information. So it would go on parents return if they claim the child and are taking the educational credit for the dependent

And, sorry, not to ignore your comments, Mt Juliet... but I think the scholarship is taxable to dependent, though I cannot find anything definitive either way.  Pub 970 doesn't really go into it.

You need to read my post below

cool.  It works out better for the client also.

colibri,

$2,000 of scholarship money and the dependent only had $300 of qualified expenses?

Pub 970

Page 10: No Double Benefit Allowed. Last Item... You cannot claim a credit based on qualified education expenses paid with tax-free education assistance such as a scholarship, grant...

Page 5: Worksheet 1-1 for determining what portion of the scholarship is taxable.

They should Zero each other out which is what I stated when you go to the ed worksheet if you enter $2,300 of amts paid and $2,000 of scholarships it will compute the credit based upon $300

Sorry MJ, I might be having an off day. I am interpreting colibri as saying that the total expenses were only $300. I really could be wrong. I do agree with you if there is $2300 of total qualified expenses.

Ok I was interpreting that the Total was $2,300 But if the Total was only $300, (I think she meant $300 out of pocket over and above the $2000) then you would be correct.

Sorry, I was away from my desk for a while... but, yes, I meant $2000 total scholarship and $300 total expenses.  

So I got it now.  The net of $1700 (which PS calculates) will go on PARENT'S return.

You need to know how much total tuition and expenses were.  If it was $2,300.00 then $2,000.00 was paid with scholarships and $300.00 out of pocket.  The $300.00 would be the amount used to calculate the credit.  W

Where are you coming up with $1700 from?

Total tuition and expenses paid were only $300 in total.  $2000 was received as scholarship.  That equals $1700 taxable scholarship.

which as I understand (now) should go on the parent's return and not on the dependent student, right?

sorry for so much confusion!  :-/

The Institution charged $2,300 of which the scholarship paid $2,000 is what we assumed

What happened to the $1700??

LOL!  Nothing really.  The scholarship (issued by the school) was granted in 2010 but no money was actually paid to student.  It's just there available as she makes tuition payments.  So $2000 granted in 2010.  $300 used up.  $1700 available for 2011.

BUT, the total $2000 scholarship is reported on the 1098T for 2010.  That's why I'm assuming $2000 less $300 used up = $1700 taxable income for 2010.

What does the 1098-T show for either Amounts Billed or Amounts Paid?