Applicable overvaluation penalty problem


Maureen, a calendar-year taxpayer subject to a 35% marginal tax rate, claimed a charitable contribution deduction of $250,000 for a sculpture that the IRS later valued at $200,000. Which is the applicable overvaluation penalty?

a) $17,500

b) $14,000

c) $3,500

d) $0

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Accounting Basics: Applicable overvaluation penalty problem
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