Lola, a Calendar Year Taxpayer Subject to a 40% Marginal

Lola, a calendar year taxpayer subject to a 40% marginal Federal gift tax rate, made a gift of a sculpture to Redd, valuing the property at $70,000. The IRS later valued the gift at $100,000. The applicable undervaluation penalty is:

A) $0.
B) $1,000 (minimum penalty) .
C) $2,400.
D) $12,000.