Lend it and forgive it, says advisor Robert E. Maloney of Annapolis, Md. After Mom and Dad each write $11,000 checks to their daughter and son-in-law for the current year's annual exclusion gifts, they separately lend each $9,000. "Come January, the parents write letters to the children saying the notes have been canceled and converted to gifts" covered by the new year's exclusion, Maloney says.
To do it right, you need bona fide, interest-bearing I.O.U.s, he adds.