Which tax was influenced by the Economic Recovery Tax Act of 1981 regarding transfers between spouses?

The Economic Recovery Tax Act of 1981 significantly impacted the estate tax, particularly in regard to transfers between spouses. One of the key provisions introduced by this act was the federal estate tax marital deduction, which allowed for unlimited transfers of property between spouses to be exempt from estate taxes. This was a major change that facilitated estate planning and ensured that couples could transfer wealth to one another without incurring tax liabilities at the time of transfer.

By allowing these transfers to occur without tax penalties, the legislation aimed to provide relief to married couples and promote economic recovery by enabling families to manage their assets more freely. This also encouraged wealth retention within families and helped stabilize family-owned businesses. Therefore, the relationship established by the Economic Recovery Tax Act with respect to estate tax illustrates its broader influence on financial planning and taxation strategies for married couples.