Unified Credit A credit is an amount that eliminates or reduces tax. A unifiedcredit applies to both the gift tax and the estate tax. You mustsubtract the unified credit from any gift tax that you owe. Anyunified credit you use against your gift tax in one year reduces theamount of credit that you can use against your gift tax in a lateryear. The total amount used against your gift tax reduces the creditavailable to use against your estate tax. Berlino HotelPreviously, the unified credit was $192,800, which eliminated taxeson a total of $600,000 of taxable gifts and taxable estate. Theseamounts were increased for gifts made, and for estates of decedentsdying, after 1997. The following table shows the unified credit andthe applicable exclusion amount for the calendar year in which a giftis made or a decedent dies. Year Unified Credit ApplicableExclusionAmount 1998 $202,050 $ 625,000 1999  211,300 650,000 2000 and 2001  220,550 675,000 2002 and 2003  229,800 700,000 2004  287,300 850,000 2005  326,300 950,000 After 2005  345,800 1,000,000 For examples of how the credit works, see Applying theUnified Credit to Gift Tax and hotel rooms PontaApplying the Unified Creditto Estate Tax, later.