(LO3) Norma’s grandma passed away on August 18, 2023. She left cash and land to Norma in her will. An estate tax return was not filed because the estate’s total fair market value was low enough to not warrant it. On December 22, 2023, Norma sold the land for $800,000.

On her 2023 tax return, Norma reported the sale on her tax return reflecting a small gain of \($75,000\) using a basis of \($725,000.\) In October of 2024, the IRS audited Norma’s 2023 tax return and said the land’s true fair market value as of the date of death was \($225,000,\) not \($725,000,\) resulting in a gain of \($575,000.\) This increased her tax liability for 2023 by \($103,750.\) What potential misvaluation penalty could Norma be subject to?