Video: Lifetime/Unified Credit

In this lesson, Nick Palazzolo, CPA, outlines the essentials of the lifetime/unified credit, a crucial tax provision that offers individuals the advantage of distributing assets tax-free either during their lifetime or upon death. He takes a deep dive into how the unified credit simplifies tax management by combining gift and estate tax exemptions and how the current exemption amounts affect tax liabilities. Nick also clearly elucidates on the interplay between annual exclusion and the lifetime exemption, providing practical examples to illustrate the impact on taxable gifts and estate taxes. He wraps up this comprehensive review with a detailed example, showing how the unified credit is applied in a real-world scenario, resulting in savings on gift taxes—demonstrating the strategic benefits of understanding and applying these tax codes effectively.