Assume Kenny died today, and Kati is appointed executor. Unfortunately, Kati forgot to file an Estate Tax Return (Form 706) and pay the estate tax due of $2,496,736 until 68 days after the returns due date. How much is the failure-to-file penalty (reduced for any concurrently running penalties if applicable)?

A) $37,451

B) $249,674

C) $337,059

D) $374,510

I am thinking the answer is D - $374,510 My work is below. Can you provide me your answer with a detail explanation. Thank you.

$ 2,496,736.00 Taxes Due

5% Penalty

$ 124,836.80

3 Months =

$ 374,510.40

Tax Due = $ 2,496,736.00

0.500% Penalty for Late Payment =

$ 12,483.68

3 Months =

$ 37,451.04