What term refers to the amount of the combined total of taxable gifts and the taxable estate that is exempt from taxation?

• A. Unified credit
• B. Portable
• C. Net estate
• D. Lifetime exemption

Answer: (D)

In federal transfer taxes, gifts made during life and the estate at death share a single exemption amount, called the lifetime exemption. This is the dollar value that can pass tax-free across both channels; the unified credit offsets tax on that combined amount. Any gifts plus the taxable estate that exceed this exemption are taxed at the applicable rates. The term portable refers to transferring any unused portion of that exemption to a surviving spouse, which is related but not the basic exemption itself. Net estate is simply the estate value after debts and deductions, not the amount exempt.