“It would not fall within the $12,000 standard deduction, because a dependent calculates the standard deduction based on earned income.”
We had this debate a few weeks ago (see posts 5-9 here http://talk.collegeconfidential.com/financial-aid-scholarships/2091896-dependent-status-for-students-and-new-tax-law-p1.html) and the conclusion was that this is not the correct interpretation.