Pursuant to Joshua's will, Penny (Joshua's sister) inherits property.Four years later Penny dies.Federal estate tax attribu?table to the inclusion of the property in Joshua's gross estate was $90,000.The estate tax attributable to the inclusion of the property in Penny 's gross estate is $60,000.Penny 's credit for tax on prior transfers is:

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The credit for tax on prior transfers is calculated based on the lesser of the estate tax attributable to the property in the transferee's estate ($60,000) or the estate tax attributable to the property in the transferor's estate ($90,000). Therefore, Penny's credit is $60,000. However, the credit is reduced by a factor based on the time elapsed since the transfer. Since four years have passed, the reduction factor is 20%, so the credit is $60,000 - (20% of $60,000) = $48,000.

Pursuant to Joshua's Will, Penny (Joshua's Sister) Inherits Property