A Unified Credit Is Subtracted in Calculating Both the Gift

question 41

Multiple Choice

A unified credit is subtracted in calculating both the gift tax and the estate tax. Why doesn't this calculation have the effect of increasing the total unified credit amount?

• A) The tentative estate tax is reduced by only taxes payable on adjusted taxable gifts rather than gross gift taxes.
• B) The unified credit only offsets the exemption equivalent.
• C) The unified credit cannot be used to offset gift taxes on adjusted taxable gifts.
• D)The unified credit varies in amount from year to year.
• E)None of these

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