ACCT 614 Week 4 Case Study 2 Example

Reviewed by Thomas Kerrigan, MBA, CPA · Liberty University · Updated

This ACCT 614 Week 4 sample case study tests the valuation of a gift. A composite couple hold rental buildings worth $6,000,000 in a family LLC and want to give each of their two daughters a 20 percent nonvoting interest, which an appraiser values at a 30 percent discount from the units' share of net assets. The one-page paper asks whether the gift tax regulations allow the discount, how a 1993 revenue ruling treats minority interests passed within a family, what adequate disclosure on Form 709 buys, and why a 2017 Tax Court decision makes retained control dangerous at death. It ends on honest weights and measures. In Liberty University ACCT 614, this 75-point MS in Accounting case study is the second of four and falls in Module/Week 4.

CourseACCT 614 Estate, Trust, and Gift Taxation (ACCT614)
Module/Week4
AssignmentCase Study 2
Paper typeCase study
Lengthabout 345 words, 1 double-spaced pages plus title page and references. Course guide: a single page of text in APA style, with its own title page and running head and a reference list naming at least 2 CCH Intelliconnect sources besides the textbook and Bible
FormatAPA 7 student paper
Points75
SchoolLiberty University Online
ProgramMS in Accounting
Where it sitsModule/Week 4 in Liberty's published ACCT 614 course guide; current sections can differ
UpdatedOctober 2026

Free sample paper for ACCT 614 Week 4

1

Discounting a Gift of Family LLC Units: Valuation, Disclosure and the Section 2036 Risk for the Navarro Family

 

[Student Name]

School of Business, Liberty University

ACCT 614: Estate, Trust, and Gift Taxation

Case Study 2

[Instructor Name]

[Date]

 

The family, company and figures are a composite written for this sample; the regulations, ruling, case and Bible passage cited are real.

Why this part earns its pointsThe facts are stated once, with the numbers the valuation needs.
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Discounting a Gift of Family LLC Units: Valuation, Disclosure and the Section 2036 Risk for the Navarro Family

The Plan

Luis and Teresa Navarro own Navarro Properties LLC, whose rental buildings are worth $6,000,000 net of debt. In 2026 they plan to give each daughter 20 percent of the company as nonvoting units and to keep the voting units and the manager's role. An appraiser values each 20 percent interest at $840,000, a 30 percent discount from its $1,200,000 share of net assets.

Why this part earns its pointsThe standard of value comes first, because every discount is measured against it.
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Is the Discount Allowed?

The gift tax values property at the price a willing buyer and a willing seller would agree on, neither under compulsion and both knowing the relevant facts (Treas. Reg. § 25.2512-1, 2025). A buyer of a nonvoting 20 percent interest could not force distributions, sell the buildings or find a ready market for the units, so that buyer would pay less than the units' share of the buildings. The family relationship does not change this: the IRS will not combine relatives' holdings to deny a minority discount on a gift (Rev. Rul. 93-12, 1993). The discount is therefore allowable, but its size must be supported. The Navarros should attach the full appraisal to Form 709 so the gift is adequately disclosed and the three-year period for challenging the value begins (Treas. Reg. § 301.6501(c)-1, 2025).

Why this part earns its pointsThe estate-side risk is treated as the larger one, because it arises only at death.
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The Estate Risk

The larger risk sits at death. In Estate of Powell v. Commissioner (2017), the Tax Court pulled transferred partnership interests back into a decedent's estate under Section 2036 because she could join with others to dissolve the partnership. A discount earned during life can be undone at death if the parents keep too much control. Because the Navarros would stay on as managers and hold every voting unit, their position looks closer to Powell's than they may expect. They should limit their retained powers, perhaps by giving an independent co-manager a say over distributions, take market-rate management fees and keep the company's money separate from their own.

Honest Measures

Scripture calls a false balance an abomination and a just weight a delight (English Standard Version Bible, 2001/2016, Proverbs 11:1). The discount should reflect what the units are truly worth to an outsider, not a number chosen to save tax.

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References

English Standard Version Bible. (2016). Crossway. (Original work published 2001)

Estate of Powell v. Commissioner, 148 T.C. 392 (2017).

Rev. Rul. 93-12, 1993-1 C.B. 202 (1993).

Treas. Reg. § 25.2512-1 (2025).

Treas. Reg. § 301.6501(c)-1 (2025).

What the ACCT 614 Week 4 instructions ask

Case Study 2 is due in Module/Week 4 of ACCT 614, when the second discussion forum also closes and Hoffman et al.'s fourth chapter and its presentation make up the reading. As with each case in the course, the facts come in the instructions and the answer has to fit on a single APA page, framed by a title page that carries the running head and by the references that follow. The CCH Intelliconnect database must supply two or more of the listed sources, and the textbook and Bible do not count toward that pair. A valuation case asks the student to measure property, the first of the course's learning outcomes, and to explain why the measured value may differ from what the owner thinks the property is worth.

How this ACCT 614 Week 4 example is built

The sample opens with the facts in two sentences, then answers three questions in order. The first paragraph of analysis states the willing buyer, willing seller standard from the gift tax regulations and explains why a buyer would pay less for a nonvoting minority interest than for its share of the buildings. The second explains why a family relationship does not erase that discount, citing the 1993 ruling, and why the appraisal should be attached to the return. The third turns to the estate side, where retained control can pull the transferred units back into the parents' estates. A brief closing paragraph weighs the plan's integrity against Scripture's demand for honest measures, then gives a recommendation the couple can act on.

ACCT 614 Week 4 grading rubric: where the points go

A valuation case in ACCT 614 is marked mainly on whether the standard of value is stated and applied correctly, whether the discount is supported rather than assumed, and whether the student recognizes the audit and estate risks the plan creates. Primary authority from CCH Intelliconnect should anchor each step, and the textbook and Bible are cited in addition, not instead. The grader also checks the one-page limit, the running head, title page and reference list in current APA style, and the ethical evaluation the course's sixth outcome requires. Papers that accept the appraiser's 30 percent as a fact, or that omit the disclosure that starts the limitations period, tend to lose the most points here.

ACCT 614 Week 4 help: mistakes that cost points

Begin with what is being given, a fractional, nonvoting interest, not a share of buildings, and state the standard of fair market value before any discount. Explain each discount in a phrase: a lack of control because the holder cannot direct the company, and a lack of marketability because no ready market exists for the units. Cite the 1993 revenue ruling for the point that family attribution does not apply to gifts. Recommend a qualified appraisal attached to Form 709, since adequate disclosure starts the three-year clock. Then look past the gift to the estate: if the parents keep the right to decide distributions or dissolve the company, Section 2036 can undo the plan at death. Keep all of that within one page.

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What is ACCT 614 Case Study 2?

The 75-point second case study, due in Module/Week 4 as a one-page APA paper on a tax case from the instructions, drawing at least two of its sources from CCH Intelliconnect rather than from the course text or Scripture.

Where can I find a free ACCT 614 Week 4 sample paper?

This page holds a complete ACCT 614 Week 4 case study sample on valuing gifts of nonvoting family LLC units, including the discounts, adequate disclosure and the Section 2036 risk.

Can gifts to family members be valued with a minority discount?

Yes. Rev. Rul. 93-12 holds that the IRS will not aggregate family members' interests to deny a minority discount on gifts of stock or similar interests among relatives.

What is adequate disclosure on a gift tax return?

Reporting a gift on Form 709 with the detail the regulations require, often a qualified appraisal, so the three-year period for the IRS to challenge the value starts to run.

What else is due in ACCT 614 Module/Week 4?

Discussion Board Forum 2, a thread with replies, is due with this case study, and the reading is Hoffman et al. chapter 4 with a presentation.

Use it as a model, or ask for your own

This paper is an original model written by our desk for study. It is not a submitted student paper and not an official Liberty University document. Read it for structure and reasoning, then write your own to the instructions in your Canvas course. If you want a version built to your exact prompt and rubric, the first custom sample is free and arrives in 24 to 48 hours.

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