Before the Tax
Reform Act of 1976 was passed, the exemptions were $60,000 death-time and the $30,000 lifetime. That Act combined the estate and gift taxes
into a single unified tax that could be reduced by a unified credit which replaced the two exemptions.
The current estate tax
form 706 (from year 2010 here) has a related portion that reads as follows:
2010 FORM 706 Part 2—Tax Computation
asks on line 4 for you to state total gifts as follows:
Adjusted taxable gifts
(total taxable gifts (within meaning of section 2503) made by decedent after Dec 31, 1976 other than gifts that are includible in deceased gross estate (sec 2001(b))).
Does this mean that any gifts totaling less than $30,000 that were gifted before 1976 are not listed in the estate tax documents and not included in the estate tax calculations currently? Does that mean that gifts made before 1976 fall under the old law
of the $30,000 lifetime exemption and gifts made after 1976 fall under the new law and are included in the unified credit? If a gift of $50,000 was given before 1976 and the man died in 1984, then would only $20,000 of the gift be used in estate tax calculations , while the first $30,000 would be ignored because it fell under the old law where the gift and estate taxes were separated, not united?