The Taxpayer Can Avoid a Valuation Penalty for Overstating the Value

question 63

Short Answer

The taxpayer can avoid a valuation penalty for overstating the value of a charitable contribution by showing that the deduction claimed was based on a qualified ____________________.

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Definitions:

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they actually do pay.

Law of Diminishing Marginal Utility

The principle that as a person consumes more of a product, the satisfaction (utility) gained from consuming each additional unit decreases.

Diminishing Marginal Utility

is an economic principle stating that as a person increases consumption of a product, there is a decline in the additional satisfaction (utility) that person gains from consuming one more unit of the product.

Marginal Utility

The additional satisfaction or usefulness obtained from acquiring or consuming one more unit of a good or service.