Compute the undervaluation penalty

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Problem - 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 Federal estate tax rate of 40%.

 

Reported Value

Corrected IRS Valuation

a

$20,000

$25,000

b

100,000

150,000

c

150,000

250,000

d

150,000

500,000

Reference no: EM132664462

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