Malik, Inc., a calendar year C corporation subject to a 35% marginal income tax

Question

Malik, Inc., a calendar year C corporation subject to a 35% marginal income tax rate, claimed a Form 1120 charitable contribution deduction of $30,000 for a sculpture that the IRS later valued at $10,000. The applicable overvaluation penalty is: A. $7,000 B. $0 C. $10,000 (minimum penalty) S. $20,000 Malik, Inc., a calendar year C corporation subject to a 35% marginal income tax rate, claimed a Form 1120 charitable contribution deduction of $30,000 for a sculpture that the IRS later valued at $10,000. The applicable overvaluation penalty is: A. $7,000 B. $0 C. $10,000 (minimum penalty) S. $20,000 A. $7,000 B. $0 C. $10,000 (minimum penalty) S. $20,000

Explanation / Answer

Ans : B

Since, the additional tax($7000) is less than $10,000(required) to access the penalty

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