Unified Gift and Estate Tax Credit

The unified gift and estate tax credit is the lifetime federal credit available to each taxpayer to reduce the tax on taxable transfers that he or she makes during life and at death.

Under The Economic Growth and Tax Relief Reconciliation Act of 2001, the gift tax credit schedule and estate tax credit schedule are no longer unified after 2004. The gift tax credit equivalent is $1,000,000 indefinitely, while the estate tax credit equivalent is $2,000,000 in 2006-2008 and scheduled to increase to $3,500,000 in 2009.

A person can give up to $1,000,000 in taxable gifts during life without paying transfer tax (gift tax). A person can give up to $2,000,000 in taxable gifts during life and at death without paying transfer tax (gift tax or estate tax).

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