Unified Credit Exemption

The amount of property the federal government allows a person to transfer during life or after death without paying gift or estate taxes (together called transfer taxes).

That exemption amount is $2 million in 2008 and will go up to $3.5 million in 2009. In 2010 the estate tax will be repealed and then reinstated in 2011 with an exemption of $1 million, unless Congress passes a new law.

Currently, annual gifts of up to $12,000 to as many individuals as one wishes may be made in each calendar year by an individual (and gifts of up to $24,000 may be made by a married couple) without counting against the lifetime credit exemption.