Unified Tax Credit refers to a tax credit that combines the lifetime gift tax exemption and the estate tax exemption into a single amount, allowing individuals to transfer wealth without incurring gift or estate taxes up to a specified limit.
This credit is particularly relevant in estate planning, as it ensures that individuals can pass on a certain amount of their estate to beneficiaries without facing tax liabilities. For example, if the unified tax credit limit is $11.7 million, an individual can give away or transfer property worth up to that amount during their lifetime or at death without incurring federal gift or estate taxes.
Changes to this credit can occur with new legislation, making it crucial for individuals and their advisors to stay informed about current limits and regulations.
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