When placing the sheetrock around top of the shower, should I set it on the lip and use caulk. Are keep it higher and use mud?

Thanks NOHELPER

Nohelper- THe way Always used to do it was I left about a 1/8 " and when I did the mudding & tapeing I would mud then put sheetrock tape there and let it go all the way to the top edge, then when I was doing trim I would Take silicone and run a bead of it there just to make it more moisture proof. If I have helped with your question ,rate my answer below, Have a good day & GOD BLESS ::: F.B.E.

Set it so it overlaps the lip and caulk with Dap Ultra plus caulk. DAP - ALEX ULTRA Acrylic Latex Sealant Plus Silicone 230 Grade w/Microban (http://www.dap.com/docs/energystar/alex_ultra.aspx) I use this stuff in showers all the time because it has a built in mildewcide.

Either way you do it whether its sits on the tub or not you still are going to have to flat tape and mud that joint.