Marshall takes a $12,000 distribution from his IRA to pay some of his daughter's $18,000 qualified education expenses at an eligible educational institution. His daughter paid $8,000 of her expenses with a tax free scholarship. How much of Marshall's IRA distribution is subject to 10% tax on early distribution?

1. $10,000

2. $6000

3. $2,000

4. $0

* I believe it's $2000? She reduced her expenses by $8000 with a tax free scholarship, leaving $10,000 balance of expenses. Please provide reference.