Compute the undervaluation penalty for each of the following independent cases involving the value of a closely held business in the decedent’s gross estate. In each case, assume a marginal estate tax rate of 35%.
|
Reported |
Corrected IRS |
|
|
a. |
$ 20,000 |
$ 25,000 |
|
b. |
100,000 |
150,000 |
|
c. |
150,000 |
250,000 |
|
d. |
150,000 |
500,000 |