<p>Take the credit. As long as nothing on the scholarship info says it is only for tuition, you can allocate it however you like. I don’t think you need a paper trail for that. Just write it all down clearly and file it with your tax papers so that if you are audited, you’ll be able to figure out what you did and be able to explain it.</p>
<p>Did your daughter have to buy any required textbooks or supplies, and if so does she have receipts? If so, you can use that spending toward the AOC (thus paying tax on less of her scholarship).</p>