What is the Unified Tax Credit?
Unified tax credits are a form of federal tax credit that may be used to offset the amount of estate or gift tax incurred within a given tax period. Sometimes referred to as the Generation Skipping Transfer tax, the unified tax credit helps to reduce the tax liability that normally comes along with inheritances or gifts of financial instruments that are received. The tax credit can help to relieve some of the tax burden that would otherwise possible mean the necessity of selling the gift or inheritance in order to settle the taxes owed. Currently, the unified tax credit allows taxpayers to total the amount of any estate or gift taxes that are owed during the tax year and apply for a credit for at least a portion of the total taxes due. The unified tax credit can sometimes account for as much as one third of the taxes assessed, which can be a substantial tax break when the gifts or inheritance involves property or valuable stocks and other investments. As with all types of tax credits,
