Gadsden, Who Is Subject to a 40% Marginal Federal Gift

question 91

Multiple Choice

Gadsden, who is subject to a 40% marginal Federal gift tax rate, made a gift of a sculpture to Marvin, valuing the property at $150,000. The IRS later valued the gift at $400,000. The applicable undervaluation penalty is:

• A) $0.
• B) $20,000.
• C) $25,000 (maximum penalty).
• D) $40,000.

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Definitions:

Ethics

A set of moral guidelines and principles that influence our behaviors and interactions.

Behaviors

Actions or reactions of a person or system, often in response to the environment or stimuli.

Misappropriation

The unauthorized use of another's name, likeness, or personal information for personal gain.

Trend

A general direction in which something is developing or changing, often reflected in popular behavior, opinion, or style.