TP donates a painting to a local art museum (a qualified charity). The painting cost TP $2,000. He purchased it 10 years ago. According to one of TP's friends the painting is worth $40,000. TP did not have the painting appraised and did not receive any offers to purchase the painting. On his income tax return, TP deducts $40,000 as a charitable contribution. Upon later audit by the IRS, it is determined that the true value of the painting was $30,000. Assuming that TP is subject to a 24% marginal Federal income tax rate, his penalty for overvaluation is: 1. $5,000. 2. $0. 3. $2,000. 4. $10,000 (minimum penalty). 5. $2,400