ACCT 614 Week 7 Case Study 4 Example

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

This ACCT 614 Week 7 sample case study follows a composite complex trust through its 2026 fiduciary income tax. The trust earned $60,000 of interest and dividends and $20,000 of capital gain kept in principal, paid a $4,000 trustee fee and distributed $30,000 to its one beneficiary. The page computes distributable net income and the distribution deduction, shows how much income stays in the trust where the 37 percent rate and the 3.8 percent investment income tax begin at $16,000, and asks whether a further distribution in early 2027 under the 65-day election would serve both the beneficiary and the trust's purpose. It closes the case series of Liberty University ACCT 614 in Module/Week 7, worth 75 points in an MS in Accounting course.

CourseACCT 614 Estate, Trust, and Gift Taxation (ACCT614)
Module/Week7
AssignmentCase Study 4
Paper typeCase study
Lengthabout 347 words, 1 double-spaced pages plus title page and references. Course guide: one page of fiduciary tax analysis in APA style, with a running head on the title page and a reference list in which at least 2 entries come from CCH Intelliconnect, not counting the textbook and Bible
FormatAPA 7 student paper
Points75
SchoolLiberty University Online
ProgramMS in Accounting
Where it sitsModule/Week 7 in Liberty's published ACCT 614 course guide; current sections can differ
UpdatedOctober 2026

Free sample paper for ACCT 614 Week 7

1

Compressed Brackets and the 65-Day Election: Should the Hale Family Trust Distribute More of Its 2026 Income?

 

[Student Name]

School of Business, Liberty University

ACCT 614: Estate, Trust, and Gift Taxation

Case Study 4

[Instructor Name]

[Date]

 

The trust, beneficiary and figures are a composite written for this sample; the Code sections, revenue procedure and Bible passage cited are real.

Why this part earns its pointsThe figures are set out first because the computation drives everything after it.
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Compressed Brackets and the 65-Day Election: Should the Hale Family Trust Distribute More of Its 2026 Income?

The Trust's Year

The Hale Family Trust, a complex trust that may distribute or accumulate income at the trustee's discretion, earned $40,000 of interest, $20,000 of qualified dividends and a $20,000 capital gain in 2026. The instrument allocates gains to principal. The trustee paid a $4,000 fee and distributed $30,000 to Nora Hale, age 31, whose other income places her in the 22 percent bracket.

Why this part earns its pointsDistributable net income is computed before the deduction, with the gain left in principal.
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The Computation

Distributable net income excludes capital gains allocated to principal and not distributed, so it is $60,000 less the $4,000 fee, or $56,000 (I.R.C. § 643, 2025). The distribution deduction is the lesser of the amount distributed and that figure, so the trust deducts $30,000 and Nora reports $30,000 (I.R.C. § 661, 2025). The trust's taxable income is $80,000 less the fee, the deduction and its $100 exemption, or $45,900. For 2026 a trust reaches the 37 percent rate at $16,000 (Rev. Proc. 2025-32, 2025), and the investment income surtax of 3.8 percent starts at that same figure, so the ordinary income the trust keeps is taxed at the top rates.

The 65-Day Election

If the trustee distributes another $26,000 by March 6, 2027, the trust may elect on a timely Form 1041 to treat it as paid in 2026 (I.R.C. § 663, 2025). The same dollars cost about 41 percent inside the trust and 22 percent in Nora's hands. Trust taxable income would fall to $19,900, mostly the gain, saving roughly $4,000 to $5,000 depending on the mix of interest and dividends. Nora would then report $56,000 in all, and with her income well under the $200,000 threshold for a single filer, the shifted dollars escape the investment income tax entirely.

Why this part earns its pointsThe recommendation is checked against the trustee's duty, not only against tax.
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The Trustee's Duty

Stewards must above all be found faithful (English Standard Version Bible, 2001/2016, 1 Corinthians 4:2). The trustee should make the extra distribution only if the instrument permits it and it serves Nora's needs, not merely the tax result. If Nora is saving for a first home, a larger distribution fits the trust's purpose; if the settlor meant to shield principal from a beneficiary who spends freely, a tax saving is no reason to set that intent aside.

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References

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

I.R.C. § 643 (2025).

I.R.C. § 661 (2025).

I.R.C. § 663 (2025).

Rev. Proc. 2025-32, 2025-45 I.R.B. 695 (2025).

What the ACCT 614 Week 7 instructions ask

The final case of ACCT 614 falls in Module/Week 7, with Homework Assignment 3 also due and chapter 8 of Hoffman et al. and a presentation as the reading. The format repeats the first case exactly: a single APA page answers the tax facts given in the instructions, with a title page and running head ahead of it and the references behind. Of the entries in that list, a minimum of two should be traced to CCH Intelliconnect, with the textbook and Scripture added as extras. A trust income case comes late in the course because it draws on everything before it, from basis and valuation to the fiduciary return students prepare in the closing week.

How this ACCT 614 Week 7 example is built

The sample spends its page on one computation and one decision. It sets out the trust's income, the fee and the distribution, then computes distributable net income, leaving the capital gain out because the trust instrument allocates gains to principal. From there it derives the distribution deduction and the income left taxable to the trust, and shows where that income sits in the 2026 brackets. The decision paragraph tests a second distribution of $26,000 made within 65 days of year-end, explaining the election, its deadline and the tax it would save. A closing paragraph checks the idea against the trustee's duty under the instrument, so the recommendation rests on the beneficiary's interest rather than on tax alone.

ACCT 614 Week 7 grading rubric: where the points go

Instructors grade the trust case on a correct distributable net income figure, a distribution deduction limited to the right amount, and accurate use of the 2026 trust brackets. The election under Section 663(b) should be named, with its 65-day window and the rule that it is made on a timely return. Marks also go to judgment: a paper that recommends distributing all income without asking what the trust instrument allows misses the fiduciary point the course stresses. The earlier cases' format marks apply unchanged here: a page limit of one, APA details down to the running head, a pair of CCH Intelliconnect sources that the textbook and Bible cannot stand in for, and an ethical evaluation drawn from Scripture.

ACCT 614 Week 7 help: mistakes that cost points

Lay out the trust's income by type before computing anything, because capital gains allocated to principal usually stay out of distributable net income. Subtract deductible expenses such as the trustee fee, then cap the distribution deduction at the lesser of the amount distributed and distributable net income. Remember the $100 exemption for a complex trust. Use the 2026 brackets from the revenue procedure, where the top rate begins at $16,000, and note the net investment income tax starts at the same point for trusts. If you suggest the 65-day election, say that it is made on the Form 1041 filed on time and cannot be revoked. Finally, check whether the trust instrument gives the trustee discretion to distribute more.

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ACCT 614 Week 7 questions, answered

What is ACCT 614 Case Study 4?

The 75-point final case study, due in Module/Week 7 alongside Homework Assignment 3, written as a single APA page on a trust's income tax, citing a pair or more of CCH Intelliconnect sources.

Where can I find a free ACCT 614 Week 7 sample paper?

A full ACCT 614 Week 7 case study sample appears on this page, computing a complex trust's distributable net income and testing a 65-day election under the 2026 trust brackets.

What is distributable net income?

The measure in Section 643 that caps a trust's distribution deduction and the amount beneficiaries report, generally the trust's taxable income before that deduction, with capital gains kept in principal left out.

What is the 65-day rule for trusts?

Section 663(b) lets a trustee elect, on a Form 1041 filed on time, to count payouts in the opening 65 days of one year as though made on December 31 of the year before.

What else is due in ACCT 614 Module/Week 7?

Homework Assignment 3, five largely numerical problems in an Excel workbook, is due in the same week, while chapter 8 of Hoffman et al. and its presentation supply the reading.

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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