Unified tax credit

Unified tax credit

A federal tax credit that reduces tax liability, dollar for dollar, on lifetime gifts and asset transfers at death.

Unified Credit

In the United States, a tax credit on estates and large gifts. The unified credit is exceptionally large so that most people will not need to pay federal taxes on their estates and large gifts. For example, the unified credit on an estate is usually around $1 million, meaning that the estate has to be worth more than that in order to be subject to the estate tax.
References in periodicals archive ?
Through tools such as a Unified Tax Credit, Irrevocable Trusts, and Charitable Remainder Trusts, you have more control over asset distribution and can potentially reduce taxes.
The federal unified tax credit is a dollar amount (currently $345,800), which can be used to offset or pay the estate tax liability on a decedent's estate that is imposed by the federal estate tax law.
Estate planning documents drafted prior to the new law should be reviewed; wills and trusts referencing the unified tax credit may have an unintended result, not distributing assets in accordance with the decedent's intent.
During the 10-year period when the death tax is phased down and repealed, significant relief will be provided through death tax rate reductions as well as through future increases in the unified tax credit.
Gifts covered by the annual exclusion do not reduce a donor's $675,000 unified tax credit.
Under current law, estates subject to death tax are eligible for a unified tax credit of up to $675,000; the exemption is scheduled to increase, to $1 million by 2006.
5 million minus the unified tax credit on the first $600,000.
These transfers exhausted nearly all of her unified tax credit.
During the nine-year period when the death tax is phased down and repealed, significant relief will be provided through death tax rate reductions as well as through future increases in the unified tax credit.
Once an estate is valued, a disclaimer or partial qualified terminable interest property (QTIP) election may facilitate using the decedent's unified tax credit or fine-tuning the marital deduction.
Second, the $202,050 unified tax credit shelters a greater portion of M's estate (the smaller estate) from taxes (the credit rises to $211,300 in 1999, eventually rising to $345,800 by 2006).
The gifts did not result in any gift tax payable, but used a portion of T's unified tax credit.
Full browser ?