Ming (A Calendar Year Taxpayer) Donates a Painting to a Local

question 61

Multiple Choice

Ming (a calendar year taxpayer) donates a painting to a local art museum (a qualified charity) .The painting cost Ming $2,000 ten years ago and, according to one of Ming's friends (an amateur artist) , is worth $40,000.On his income tax return, Ming deducts $40,000 as a Form 1040 charitable contribution.Upon later audit by the IRS, it is determined that the true value of the painting was $30,000.Assuming that Ming is subject to a 30% marginal Federal income tax rate, his penalty for overvaluation is:

• A)$5,000.
• B)$2,000.
• C)$1,000.
• D)$0.
• E)$10,000 (minimum penalty).

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Definitions:

Early Retirements

A situation where an employee chooses to retire before the customary retirement age, often incentivized by employer offerings.

Involuntary Terminations

The act of ending an employee's contract or employment against their will, often due to layoffs or disciplinary actions.

Employee Leasing

Involves an organization paying a fee to a leasing company that provides a pool of employees who are available on a temporary basis. This pool of employees usually constitutes a group or crew intended to handle all or most of the organization’s work needs in a particular area.

Contingent Workforce

A labor pool consisting of people employed by organizations on a non-permanent basis, such as freelancers, temporary contract workers, or consultants.