Unified Transfer Tax Credit

[danjoell]

Iowa - What is the Unified Transfer Tax Credit? And can this help lower the estate tax if the donor has already passed away?

 

[loku]

Unified credit

Every American gets an automatic unified tax credit of $675,000 tax free. And, if you are married, your spouse (also a U.S. citizen) has the same exemption credit, so that you can, as a couple, give a full $1.35 million to your heirs free of Estate Tax. (That amount increases to $700,000 in 2002, $850,000 in 2004, $950,000 in 2005, and ultimately at $1,000,000 in 2006)

This credit is referred to as the "unified" credit because federal Gift and Estate Taxation are integrated into one unified tax system. There is no Estate or Gift Tax on the first $675,000 of your combined taxable gifts and transfers at death. You ante up when the sum reaches over $675,000.