Kate, Who Is Subject to a 50% Marginal Gift Tax

Kate, who is subject to a 50% marginal gift tax rate in 2009, made a gift of a sculpture to Jillian, valuing the property at $150,000.The IRS later valued the gift at $900,000.The applicable undervaluation penalty is:

A) $10,000 (maximum penalty) .
B) $75,000.
C) $150,000.
D) $375,000.
E) None of the above.