[Anonymous]

Hello all, currently studying with Becker and have read over the (tiny) portion discussing the unified estate and gift tax credit. I feel it’s rather unclear in the wording, but I think I have an idea, so if someone can chime in with whether I am correct in my thinking or not.

Basically, I see it as throughout your life you have a $1,000,000 exclusion shared between gifts given (over the $13K annual exclusion) throughout your life, and ultimately your estate. So say to make things simple, every year I give $113,000 cash to a friend; the first $13,000 is excluded per the annual exclusion, and, for the first 10 years, the remaining $100,000/year gift hits against my $1,000,000 lifetime exclusion.

So the first 10 years I can get away with that tax-free, but by year 11 I have exhausted my exclusion and now will be taxed.

Conversely, I can be a stingy person and give no gifts throughout my life, but when I die and pass everything to my children, the first $1,000,000 of my estate is excluded and whatever tax is due I can use the $345,800 credit.

Anything I am missing??