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Estate and Inheritance Tax

The Maryland estate tax is a state tax imposed on the privilege of transferring property. Simply stated, the tax consists of an accounting of everything a decedent owned or had certain interests in at the date of death. The tax is administered and collected by the Comptroller of Maryland and is due within nine (9) months after the decedent's date of death. See the MET-1 Estate Tax Return and the links below for more information.

The Maryland inheritances tax is a tax imposed on the privilege of receiving property. The tax is collected by the Register of Wills located in the county where the decedent either lived or owned property and is not due until the property is distributed from the estate. For more information, contact the Office of the Register of Wills.

Inheritance Tax Information

The inheritance tax is imposed on the clear value of property that passes from a decedent to some beneficiaries. The tax is levied on property that passes under a will, the intestate laws of succession, and property that passes under a trust, deed, joint ownership, or otherwise. The tax is collected by the Register of Wills located in the county where the decedent either lived or owned property. For more information, visit the Office of the Register of Wills.

Estate Tax Information

The Maryland estate tax is a state tax imposed on the transfer of property in a decedent's estate. Payment of the Maryland estate tax is due nine (9) months after the decedent's date of death.

A Maryland estate tax return is required for every estate whose federal gross estate, plus adjusted taxable gifts, plus property for which a Maryland Qualified Terminal Interest Property (QTIP) election was previously made on a Maryland estate tax return filed for the estate of the decedent's predeceased spouse, equals or exceeds the Maryland estate tax exemption amount for the year of the decedent's death, and the decedent at the date of death was a Maryland resident or a nonresident but owned real or tangible personal property having a taxable situs in Maryland.

The gross estate includes all property, real or personal, tangible or intangible, wherever situated, in which the decedent had an interest. It includes such items as annuities, joint assets with right of survivorship, transfers made without adequate consideration, the includible portion of tenancies by the entirety, certain life insurance proceeds, and general power of appointment property, to name a few. The value of the property must be based upon an appraisal from a Certified Appraiser. For more information on the gross estate, visit the IRS website regarding the Federal Estate Tax and review § 2031 of the Internal Revenue Code.

The probate estate is property of the decedent owned individually or as tenants in common. Non-probate property is property that passes by the terms of the instrument under which it is held or by operation of law. The total gross estate for estate tax purposes includes probate and non-probate property.

The Maryland estate tax is based on the maximum credit for state death taxes allowable under § 2011 of the Internal Revenue Code. The credit used to determine the Maryland estate tax cannot exceed 16% of the amount by which the decedent's taxable estate exceeds the Maryland estate tax exemption amount for the year of the decedent's death.

Tax rates for decedents who died before July 1, 1999:

  • 1% tax on the clear value of property passing to a child or other lineal descendant, spouse, parent or grandparent.
  • 10% on property passing to siblings or other individuals.
Tax rates for decedents who died on or after July 1, 1999:
  • 0.9% tax on the clear value of property passing to a child or other lineal descendant, spouse, parent or grandparent.
  • 8% on property passing to siblings.
  • 10% on property passing to other individuals.
Tax rates for decedents who died on or after July 1, 2000:
  • Property passing to a child or other lineal descendant, spouse of a child or other lineal descendant, spouse, parent, grandparent, stepchild or stepparent, siblings or a corporation having only certain of these persons as stockholders is exempt from taxation.
  • 10% on property passing to other individuals.

Effective for decedents who die on or after July 1, 2009, a primary residence that is owned by domestic partners held in joint tenancy at the time of one partner's death is exempt from the Maryland inheritance tax.

For more information about the inheritance tax, contact the Office of the Register of Wills in the appropriate county.

During the 2012 Legislative Session the Maryland General Assembly enacted the Family Farm Preservation Act of 2012, which adds a new subsection to Title 7 of the Tax-General Article allowing for the exclusion of up to $5,000,000 of the value of qualified agricultural property from the value of the gross estate for decedents dying after December 31, 2011. The new provision also provides that the Maryland estate tax may not exceed 5% of the value of specified agricultural property exceeding $5,000,000. Maryland qualified agricultural exclusion forms may be obtained by calling the Estate Tax Unit at (410) 260-7850.

Legislation enacted during the 2014 legislative session gradually conforms the Maryland estate tax exemption amount to the value of the unified credit under the federal estate tax, thereby increasing the amount that can be excluded for Maryland estate tax purposes. The increase in the amount that can be excluded for Maryland estate tax purposes is phased over five years and is equal to (1) $1.5 million for a decedent dying in calendar year 2015; (2) $2.0 million for a decedent dying in calendar year 2016; (3) $3.0 million for a decedent dying in calendar year 2017; (4) $4.0 million for a decedent dying in calendar year 2018; and (5) the amount excluded under the federal estate tax for a decedent dying on or after January 1, 2019.

Legislation enacted during the 2015 legislative session changed the option allowing Maryland estate tax returns to be filed with the Register of Wills or with the Comptroller. Beginning July 1, 2015, all Maryland estate tax returns must be filed directly with the Comptroller. Requests for certification of the amount of inheritance paid on behalf of a decedent will be made by the Comptroller only; such certification requests should no longer be made by the personal representative of the decedent's estate or any other person required to file a Maryland estate tax return regarding property passing from the decedent.

Legislation enacted during the 2018 legislative session decouples the Maryland exclusion amount from the federal unified credit and establishes portability. The federal tax law changes enacted in 2017 increased the value of the unified credit for federal estate tax purposes. As a result, the Maryland General Assembly enacted the Maryland Estate Tax-Unified Credit Act which alters the unified credit used for determining the amount that can be excluded for Maryland estate tax purposes. The amount that can be excluded for decedents dying on or after January 1, 2019 is $5.0 million. The Maryland exclusion amounts for decedents dying before January 1, 2019 remain the same. Additionally, the 2018 legislation established portability for Maryland estate tax purposes. Surviving spouses may now elect to claim any unused portion of their predeceased spouse’s unused Maryland estate tax exemption under certain circumstances.

The Comptroller's Office will no longer accept the federal Form 2848 or federal Form 8821 as power of attorney forms for Maryland tax purposes.

Please use one of the following forms:

Maryland Form 548 (Power of Attorney)
Maryland Form 548 Instructions
Maryland Form 548P (Reporting Agent Authorization)

We will continue to accept a durable power of attorney or any other power of attorney form authorized by Maryland law.

The completed Maryland Form 548 should include all identifying information for the taxpayer including:

  • Name(s)
  • Address
  • Social Security number(s)
  • Signature(s)
  • Date

The tax representative or appointed authority authorized to have power of attorney and to receive and inspect confidential tax information for the taxpayer must specify on the form the representative's name, mailing address, daytime telephone number, signature and designation item number (1-10). The Maryland Form 548 must also be filed with government-issued identification for the taxpayer (not the representative) unless the representative's designation is item number 1, 2 or 3.

The tax matters to be discussed by the taxpayer's representative with power of attorney must include the following information:

  • Type of Maryland tax (income, employment)
  • Maryland tax form number (502, MW506)
  • Year(s) or period(s) covered

If the power of attorney form does not include all the information as instructed it will not be accepted.

The power of attorney form shall be valid until superseded, revoked or by the death of the taxpayer(s) or representative(s).

Tax information can be disclosed to the appropriate party possessing power of attorney if the "Check Here" box on the appropriate form (Form 502, Form 505, etc.) has been marked. This authority extends to the estimated payments made for the subsequent tax year.

There is no such thing as a "Verbal POA". If a taxpayer calls and their representative is present the taxpayer can give permission for the representative to speak to us at that time. However, the approval is for that phone call at that time only.

Volunteer Income Tax Preparation Organizations V.I.T.A/A.A.R.P/T.C.E

Volunteers can use Maryland Form 548 and Maryland Form 548P with no PTIN. All information will still be required in order to accept the POA. They should clearly indicate on the form the volunteer organization with whom they are affiliated.

Power of attorney forms can be mailed, faxed or scanned and e-mailed.

If mailing the forms they can be sent to:

Comptroller of Maryland
Revenue Administration Division
P.O. Box 1829
Attn: POA
Annapolis, Maryland 21404-1829

If faxing the forms they can be faxed to 410-260-6213.

If scanning and e-mailing the forms they can be e-mailed to RADPOA@marylandtaxes.gov

For more information about power of attorney matters, call 410-260-7424, Monday - Friday, 8:30 a.m. - 4:30 p.m. You can also e-mail related inquiries to taxprohelp@marylandtaxes.gov

The Maryland estate tax is a transfer tax imposed on the transfer of assets from an estate. It is based on the maximum credit for state death taxes allowable under § 2011 of the Internal Revenue Code. The credit used to determine the Maryland estate tax cannot exceed 16% of the amount by which the decedent's taxable estate exceeds the Maryland estate tax exemption amount for the decedent's year of death. Please note, for decedents dying after December 31, 2001, the maximum allowable credit for state death taxes will not be reduced, for purposes of the Maryland estate tax, by any act of Congress enacted on or after January 1, 2001.

If the inheritance tax paid is equal to or exceeds Maryland's determination of the credit for state death taxes, no Maryland estate tax is due. See also Calculation Method.

The duly appointed personal representative of the decedent's estate must file the return. If there is more than one personal representative, the return must be made jointly by all. If there is no personal representative appointed, every person in actual or constructive possession of any property of the decedent is required to make and file a return. See FAQ #3, What are the requirements for filing a Maryland estate tax return? to determine if you are required to file.

The filing requirement varies depending on the year of the decedent's death.

Generally, a return is required for every estate whose federal gross estate, plus adjusted taxable gifts, plus property for which a Maryland Qualified Terminal Interest Property (QTIP) election was previously made on a Maryland estate tax return filed for the estate of the decedent's predeceased spouse, equals or exceeds the Maryland estate tax exemption amount for the year of the decedent's death, and the decedent at the date of death was a Maryland resident or a nonresident but owned real or tangible personal property having a taxable situs in Maryland.

Year of death Gross estate
2019 and after $5,000,000
2018 $4,000,000
2017 $3,000,000
2016 $2,000,000
2015 $1,500,000
2002-2014 $1,000,000
2000-2001 $675,000
1999 $650,000
Prior to 1999 Contact us

Once you have determined a Maryland estate tax return is required to be filed for the estate, complete the federal estate tax return, IRS Form 706, for the date of the decedent's death. You will be required to complete the federal return even though you may not be required to file the return with IRS.

Using the information from the federal return, complete the Maryland estate tax Form MET-1, using the form appropriate for the date of the decedent's death. See Maryland Estate and Fiduciary Forms for a list of MET-1 forms.

File the return within nine (9) months after the decedent's date of death, or by the approved extension date. The Maryland estate tax return must be filed directly with the Comptroller of Maryland.

The Comptroller of Maryland will submit the MET-1 to the Register of Wills for certification on Section III.

Include the federal return, complete with all schedules, attachments and supporting documents when filing the Maryland estate tax return. In all cases, you must submit a certified death certificate, the last will and testament and any applicable trusts.

The Maryland estate tax is payable to the Comptroller of Maryland.

Mail the estate tax return and payment to:

Comptroller of Maryland
Estate Tax Section
P.O. Box 828
Annapolis, MD 21404-0828

The Comptroller will send the return to the Register of Wills for completion of Section III to certify the payment of inheritance taxes.

The Comptroller of Maryland may extend the time to file an estate tax return up to six months, or up to one year if the person required to file the return is out of the United States. There are also provisions for granting an alternative payment schedule for the tax payment.

The request for an extension must be in writing and filed on or before the due date of the Maryland estate tax return. The request must include:

For more information, see Request an Extension.

Legislation enacted during the 2014 legislative session gradually conformed the Maryland estate tax exemption amount to the value of the unified credit under the federal estate tax, thereby increasing the amount that could be excluded for Maryland estate tax purposes as follows: (1) $1.5 million for a decedent dying in calendar year 2015; (2) $2.0 million for a decedent dying in calendar year 2016; (3) $3.0 million for a decedent dying in calendar year 2017; (4) $4.0 million for a decedent dying in calendar year 2018. Under the 2014 legislation, the Maryland exclusion amount was scheduled to recouple with the amount excluded under the federal estate tax for a decedent dying on or after January 1, 2019. The federal tax law changes enacted in 2017 increased the value of unified credit for federal estate tax purposes. As a result, during the 2018 Legislative Session, the Maryland General Assembly enacted the Maryland Estate Tax-Unified Credit Act which alters the unified credit used for determining the amount that can be excluded for Maryland estate tax purposes. The enacted Maryland legislation ultimately decouples the Maryland exclusion amount from the federal unified credit once again. The amount that can be excluded for decedents dying on or after January 1, 2019 is $5.0 million. The Maryland exclusion amounts for decedents dying before January 1, 2019 remain the same. The 2018 legislation also established portability for Maryland estate tax purposes. Surviving spouses may now elect to claim any unused portion of their predeceased spouse's unused Maryland estate tax exemption under certain circumstances.

During the 2015 legislative session, the Maryland General Assembly enacted legislation that changed the option allowing Maryland estate tax returns to be filed with the Register of Wills or with the Comptroller. Beginning July 1, 2015, all Maryland estate tax returns must be filed directly with the Comptroller. Requests for certification of the amount of inheritance paid on behalf of a decedent will be made by the Comptroller only; such certification requests should no longer be made by the personal representative of the decedent's estate or any other person required to file a Maryland estate tax return with regard to property passing from the decedent.

During the 2012 Legislative Session the Maryland General Assembly enacted the Family Farm Preservation Act of 2012, which adds a new subsection to Title 7 of the Tax-General Article allowing for the exclusion of up to $5,000,000 of the value of qualified agricultural property from the value of the gross estate for decedents dying after December 31, 2011. The new provision also provides that the Maryland estate tax may not exceed 5% of the value of specified agricultural property exceeding $5,000,000. Maryland qualified agricultural exclusion forms may be obtained by calling the Estate Tax Unit at (410) 260-7850.

The inheritance tax is collected by the Register of Wills located in the county where the decedent either lived or owned property. The tax is imposed on the clear value of property that passes from a decedent to certain beneficiaries. It is levied on property that passes under a will, the intestate laws of succession, and property that passes under a trust, deed, joint ownership, or otherwise. For more information, contact the Office of the Register of Wills.

The inheritance tax paid to the Register of Wills is subtracted from the gross Maryland estate tax liability and the difference is the Maryland estate tax due. If the inheritance tax paid is equal to or exceeds Maryland's determination of the credit for state death taxes, no Maryland estate tax is due.

However, the Maryland estate tax is owed and due until the inheritance tax is actually paid. If the amount of inheritance tax paid to the Register of Wills on or before the due date of the Maryland estate tax return is less than the gross Maryland estate tax liability, interest and/or penalty will be assessed on the outstanding liability. Interest will continue to accrue until the inheritance tax paid equals or exceeds the outstanding estate tax liability. See Comptroller of the Treasury v. Jameson, 332 Md. 723, 633 A.2d 93 (1993). For example, Estate owes $150,000 of estate tax, due by the nine (9) month statutory due date of January 1, 2014. Estate made two $75,000 payments of inheritance tax, one on December 1, 2013, and one on February 1, 2014. Because only $75,000 was paid by the estate tax due date, interest will be due on the remaining $75,000 from January 1, 2014 through February 1, 2014 when the amount of inheritance tax paid to the Register of Wills equaled the Maryland estate tax liability.

Yes. Maryland law provides for interest and late payment penalty if the tax is not paid when due. Interest is assessed on any portion of the liability that is not satisfied by the statutory due date, notwithstanding the fact that the tax is paid pursuant to an approved alternative payment schedule. A penalty of up to 10% is charged on any Maryland estate tax not paid by the due date.

The law allows for refunds of Maryland estate tax up to three years from the date of the event that causes the refund to become due. File an amended Maryland estate tax return to make a request for a refund of previously paid Maryland estate tax.

A fiduciary is a person who holds the legal title to real or personal property for the use and benefit of another, and includes a personal representative of a decedent's estate or a trustee of a testamentary or inter vivos trust ("living trust").

The Maryland income tax is imposed on the Maryland taxable income of a fiduciary of an estate or trust. A fiduciary figures the Maryland income tax in much the same manner as an individual.

Both a resident and a nonresident fiduciary who have Maryland taxable income and who are required to file a federal income tax return should use the Fiduciary Income Tax Return Form 504 to report and make payment of any income tax due of the estate or trust.

For more information, see Fiduciary Information on the Tax Information page.

Fiduciaries who are personal representatives of estates are subject to the Maryland income tax - as well as the Maryland inheritance tax - and may have to file Maryland Form 504 and pay the Maryland income tax. Maryland follows federal rules for filing and paying estimated taxes. Personal representatives are exempt from paying estimated taxes during the first two taxable years of the estate. See also Fiduciary Information on the Tax Information page.

If the estate is opened and closed in the same year, you are only required to file a Maryland income tax return if you filed a federal fiduciary return and have Maryland taxable income. Generally, there is no Maryland taxable income if all the income is distributed during the estate closure.

Information must be provided to the beneficiaries so that they can file an accurate Maryland return. This includes information on Maryland source income and addition and subtraction modifications.

Personal representatives and trustees must file Maryland Form 504 to pay the Maryland income tax. Fiduciaries paying estimated taxes must file Maryland Form 504D provided by the Maryland Revenue Administration Division. See also Fiduciary Information.

The Maryland estate tax return must be filed within nine (9) months of the decedent's date of death unless an extension has been granted by the Comptroller's Office. Please note that Maryland estate tax payments are due to the Comptroller of Maryland on or before the nine (9) month due date of the estate tax return, regardless of whether an extension has been granted.

A Maryland estate tax return is required for every estate whose federal gross estate, plus adjusted taxable gifts, plus property for which a Maryland Qualified Terminal Interest Property (QTIP) election was previously made on a Maryland estate tax return filed for the estate of the decedent's predeceased spouse, equals or exceeds the Maryland estate tax exemption amount for the decedent's date of death (see chart below) and the decedent at the date of death was a Maryland resident or a nonresident but owned real or tangible personal property having a taxable situs in Maryland.

The filing requirement also varies depending on the year of the decedent's death. The chart below lists the different gross estate levels that require an estate tax filing.

Year of death Gross estate
2019 and after $5,000,000
2018 $4,000,000
2017 $3,000,000
2016 $2,000,000
2015 $1,500,000
2002-2014 $1,000,000
2000-2001 $675,000
1999 $650,000
Prior to 1999 Contact us
Form MET-1

You must complete the federal estate tax return (IRS Form 706) for the date of the decedent's death before filling out the Maryland estate tax return. If the estate is not required to file a federal return, you must still complete a pro forma federal return. Using information from the federal return, you should complete the Maryland estate tax return, Form MET-1.

Schedule E

To elect to exclude up to $5,000,000 of the value of qualified agricultural property from the value of the gross estate and benefit from a tax rate not to exceed 5% of the value of such property exceeding $5,000,000, Schedule E must be filed with the Comptroller as an attachment to the Maryland Estate Tax Return. To request Schedule E and its attachments, please call the Estate Tax Unit at (410) 260-7850.

Attachments

Include the federal return, complete with all schedules, attachments and supporting documents when filing the Maryland estate tax return. In all cases, you must submit a certified death certificate, the decedent's last will and testament and any applicable trusts. Additional attachments may be requested, including, but not limited to, date of death appraisals, bank and investment account statements, Form 712s, mortgage statements, and substantiation of other deductions.

Where to file

The Maryland estate tax return must be filed directly with the Comptroller of Maryland. The Comptroller will send the return to the Register of Wills for completion of Section III to certify the payment of inheritance taxes.

The estate tax return and all attachments should be sent to:

Comptroller of Maryland
Revenue Administration Division
Estate Tax Unit
P.O. Box 828
Annapolis, Maryland 21404-0828

Use the appropriate version of Form MET-1 for the date of the decedent's death.

You may file for a refund of Maryland estate taxes by filing an amended estate tax return, using Form MET-1.

The refund claim will be considered if:

  • an erroneous amount of tax has been paid or collected, OR
  • the Maryland estate tax is decreased as the result of action taken by IRS or the estate, or an inheritance tax payment was made after a Maryland estate tax payment.

The refund claim must include an explanation and documentation to evidence the decrease directed by IRS. You are allowed to file a claim for a Maryland estate tax refund up to three years after the date of the event that caused the refund to become due.

If an additional inheritance tax payment is due to the Register of Wills, and the payment would result in a refund of previously paid Maryland estate tax, the personal representative of the estate may request the Comptroller of Maryland to pay the anticipated estate tax refund directly to the Register of Wills so the refund can be applied against the inheritance tax liability. To take this action, complete refund application Form MET-2 ADJ.

If an inheritance tax refund would result in an increase in the Maryland estate tax imposed on an estate, the claimant may request the Register of Wills to pay the inheritance tax refund directly to the Comptroller of Maryland.

Maryland estate tax payments are due to the Comptroller of Maryland on or before the due date of the estate tax return. The Maryland estate tax return must be filed within nine (9) months after the decedent's date of death unless the return has an approved filing extension. However, a filing extension does not extend the payment due date.

The payment may be sent with a Maryland estate tax remittance form (Form MET 3, found on the last page of Form MET-1) or may be sent with a letter. The letter must provide the decedent's name, Social Security number, date of death, and the county in which the estate is being probated, if applicable.

Payments should be sent to:

Comptroller of Maryland
Revenue Administration Division, Estate Tax Unit
P.O. Box 828
Annapolis, Maryland 21404-0828

If it is not possible to make a full payment on the due date, the person responsible for paying the Maryland estate tax or an authorized agent of the estate may request an alternative payment schedule.

Alternative Payment Schedule

The request for an alternative payment schedule must be made in writing by the person responsible for filing the Maryland estate tax return and paying the tax or an authorized agent of the estate.

The request must include the following information:

  • The Maryland estate tax return (in the case of an extension, the alternative payment schedule must be based on the amount that is estimated to be due).
  • The proposed alternative payment schedule, based on one of the following options:
    • A deferral of payment for up to one year. Additional deferrals may be considered on a year-by-year basis. If there is an agreement to defer the payment, then at the end of the deferral period, unless the applicant reapplies for and is granted an additional deferral, payment in full is due.
    • An installment schedule for periodic payments. If a payment installment schedule is for more than one year, the applicant is required to certify annually that the conditions and circumstances that existed at the time the alternate payment schedule was requested have not materially or significantly changed. Any significant change in the conditions and/or circumstances may result in a re-evaluation and the terms of the installment schedule may be changed by the Comptroller of Maryland.
  • A reasonable estimate of the Maryland estate tax liability, if the Maryland estate tax return is not included with the application for an alternative payment schedule. The estimate must include any information that supports the amount of the Maryland estate tax liability.
  • An inventory of the assets comprising the gross estate. The inventory should be itemized by the type of asset, valuation, and location.
  • The names and addresses of all persons responsible for filing the return and paying the tax and the authorized agent.
  • A description of all sources and amounts of income to the estate.
  • Evidence that shows the real estate is being actively marketed where the real estate comprises a majority of the assets of the estate. This must include a realtor listing agreement, a letter from the realtor, etc. The request should include an explanation with evidence supporting a decision not to sell real property in order to pay the tax liability. For example, evidence of income to pay the liability from mortgages, loans, business income, etc.
  • For those estates subject to filing a federal estate tax return, the status and balance of the federal estate tax liability and whether the IRS has allowed an alternative payment.
  • Certification that no distributions have been made or will be made before taxes are paid.

Any request for an alternative payment schedule which is approved by the Comptroller of Maryland shall be deemed to include consent on behalf of the applicant to the filing of a tax lien against the estate in any Maryland jurisdiction where there may be real or personal property and where the decedent resided. 

Requests for alternative payment schedules should be sent to:

Comptroller of Maryland
Revenue Administration Division
Estate Tax Section
P.O. Box 828
Annapolis, Maryland 21404-0828

Interest and Penalty Charges

The interest rate is set annually and applies to late payments, including an increase in the tax that is due to a change resulting from action taken by IRS or the estate, and to payments made under an alternative payment schedule.

Calendar Year Refund Unpaid Tax
2019 11% 11%
2018 11.5% 11.5%
2017 12% 12%
2016 13% 13%
2015 13% 13%
2014 13% 13%
2013 13% 13%
2012 13% 13%
2011 13% 13%
2010 13% 13%
2009 13% 13%
2008 13% 13%
2007 13% 13%
2006 4% 13%
2005 3% 13%
2004 4% 13%
2003 5% 13%
2002 8% 13%
2001 8% 13%

Penalty Charges

A penalty not exceeding 10% of the unpaid tax will be assessed if the tax is paid after the due date. A penalty of 25% will be assessed for failure to comply with a notice and demand for a return. In addition, the Comptroller shall assess a penalty of 25% of the amount of the underpayment of tax which is attributable to any substantial estate tax valuation understatement. A substantial estate tax valuation understatement occurs if the value of any property claimed, or should have been claimed, is 60% or less of the amount determined to be the correct amount of that valuation. The underpayment penalty cannot be assessed unless the portion of the underpayment attributable to substantial estate tax valuation is greater than $5,000.