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substantial estate or gift tax valuation understatement. See
sec. 6662(a) and (b).95 An estate or gift tax valuation
understatement is substantial if the value of any property
claimed on an estate or gift tax return is 50 percent or less of
the amount determined to be the correct value. See sec.
6662(g)(1). No penalty is imposed unless the portion of the
underpayment attributable to substantial estate or gift tax
valuation understatements for the taxable period (or with respect
to the estate of the decedent) exceeds $5,000. See sec.
6662(g)(2). The penalty is increased from 20 percent to 40
percent and is a gross valuation misstatement, if the value of
95SEC 6662. IMPOSITION OF ACCURACY-RELATED PENALTY.
(a) Imposition of Penalty.--If this section applies to
any portion of an underpayment of tax required to be shown on a
return, there shall be added to the tax an amount equal to 20
percent of the portion of the underpayment to which this section
applies.
(b) Portion of Underpayment to Which Section
Applies.--This section shall apply to the portion of any
underpayment which is attributable to 1 or more of the following:
(1) Negligence or disregard of rules or regulations.
(2) Any substantial understatement of income tax.
(3) Any substantial valuation misstatement under
chapter 1
(4) Any substantial overstatement of pension
liabilities.
(5) Any substantial estate or gift tax valuation
understatement.
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