Assuming a person had made taxable lifetime gifts totaling $600,000 and died in 2008, which of the following statements would be true?
The decedent's estate would have the benefit of only $75,000 as a credit equivalent (exemption) against estate tax.
The decedent's estate would have the full benefit of the newly enacted $2 million credit equivalent against the estate tax, because lifetime gifts no longer "use up" any of the credit.
The decedent's estate can use credits to pay the taxes on up to $1.4 million of the taxable estate.
The decedent's estate can use credits to pay the taxes on up to $1.4 million of the taxable estate. The $1 million gift tax credit equivalent (exemption) can be used to protect taxable gifts during life, and whatever is left can be used to protect against the estate tax up to $2 million. In this example, it appears that $600,000 of the credit equivalent would have been used to protect lifetime taxable gifts, but the credit in 2007/2008 will cover up to $2 million of estate tax, so the estate can use the credits to pay the tax on another $1.4 million of taxable estate.
The decedent's estate can use credits to pay the taxes on up to $1.4 million of the taxable estate. The $1 million gift tax credit equivalent (exemption) can be used to protect taxable gifts during life, and whatever is left can be used to protect against the estate tax up to $2 million. In this example, it appears that $600,000 of the credit equivalent would have been used to protect lifetime taxable gifts, but the credit in 2007/2008 will cover up to $2 million of estate tax, so the estate can use the credits to pay the tax on another $1.4 million of taxable estate.
_20.gif){kind=small}
