Definitions for "Unified Credit"
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 “unified” 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 “applicable credit amount.
A credit available to every individual and applied against both gift and estate taxes.