The following clarifies three of the problems in the advanced certification test found in IRS Form 6744:
Test Scenario 6: Samantha Rollins
Cancellation of Debt for a primary residence is out of scope for Massachusetts volunteers so it not covered in training. To complete this problem, ignore the 1099-C from Essex Bank. To answer question 17 in the test and retest, the loan modification from Essex Bank reduced the cost basis of her home by the amount of the debt discharged, that is, $45,000.
Test Scenario 7: Quincy and Marian Pike
- Accept as fact that “Marian and Lucas do not qualify for any health insurance coverage exemptions” as stated in the interview notes even though you think that they qualify for an affordability exemption.
- There is a typo on the form 1099-R from Essex Bank, custodian for Roth IRA of Quincy Pike. In box 7, the IRA box should be checked.
Test Scenario 8: Austin Drake
Form 1098 from Forsyth Mortgage Company has mortgage insurance premiums in box 5. The IRS changed this form from 2015 to 2016. When itemizing deductions in Practice Lab 2016 for Primary Mortgage Insurance, that screen states that these premiums are generally in box 4. That refers to the 2015 version of Form 1098, so use what is in box 5.