- 51 -
decedent's interest was $41,532,60025 as of the moment of his death.
Issue 2. Section 6662(g) Penalty
The final issue is whether petitioner is liable for the
section 6662(g) penalty. A substantial estate tax valuation
understatement occurs if the value of property claimed on a return
is 50 percent or less of the amount determined to be its correct
value, and the portion of the underpayment attributable to the
understatement exceeds $5,000. Sec. 6662(g). The penalty equals
20 percent of the portion of the underpayment attributable to the
understatement. Sec. 6662(a). The penalty does not apply to any
25 This amount is calculated as follows:
Value of JPMS at the moment immediately
prior to Mr. Mitchell's death $150,000,000
Less: Discount to reflect the loss of
Mr. Mitchell to JPMS (15,000,000)
Value of JPMS at the moment of Mr.
Mitchell's death 135,000,000
Percent of Trust's interest in JPMS x 49.04
Value of Trust's interest in JPMS prior
to discounts 66,204,000
Discount for lack of marketability and
minority interest (35%) (23,171,400)
43,032,600
Discount for possibility of lawsuit (1,500,000)
Value of Trust's interest in JPMS after
discounts 41,532,600
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