- 37 -
Respondent also determined that the estate was liable for an
addition to tax under section 6662(a), which imposes a 20-percent
addition for certain underpayments of tax. The addition is
imposed where there is an underpayment of estate tax resulting
from a substantial estate tax valuation understatement. See sec.
6662(b)(5). A substantial tax estate valuation understatement
occurs if the value of any property claimed on an estate tax
return is 50 percent or less of the amount determined to be
correct. See sec. 6662(g)(1). In the instant case, the estate
reported Renier’s stock on its return as having a value of $33.02
per share. As we have found that the correct value is $43.08 per
share, no substantial estate or gift tax valuation understatement
has occurred. Given our conclusion, we need not address whether
the estate qualifies for the reasonable cause exception contained
in section 6664(c)(1).
To reflect the foregoing,
Decision will be entered
under Rule 155.
Page: Previous 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 Last modified: May 25, 2011