A once-in-a-lifetime credit that may be applied against an individual's federal gift or estate taxes. The current credit is $192,800, which is equivalent to exempting $600,000 from federal gift or estate taxes.
Each taxpayer is allowed a credit against federal estate and gift taxes. The credit is â€œunifiedâ€ because the estate and gift tax rates, or transfer taxes, are the same. The unified credit is equivalent to the transfer tax on $675,000 worth of property in 2000, and effectively shelters that amount of property from transfer tax. This credit is also referred to as the â€œapplicable credit amount.
A credit available to every individual and applied against both gift and estate taxes.