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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Definitions:

Optic Chiasm

The part of the brain where the optic nerves partially cross, involved in visual processing.

Ophthalmoscope

A medical instrument used to examine the interior of the eye, especially the retina.

Fovea

A small depression in the retina of the eye where visual acuity is highest.

Choroid

The vascular layer of the eye lying between the retina and the sclera, providing oxygen and nourishment to the outer layers of the retina.