Oh for heavens sake. who isnt looking for a tax break and my heart feels for you. i do believe you and your spouse can give each child $10,000.00 per year, but i would check with my accountant before you take my word. i am no accountant, but that is what we have been doing. incidentally, if you have a capital gains situation, get it over this year because next year you will be killed with the capital gains tax. we held the money we made from the sale of our beach house and then when it was released to us the irs sent us a penalty tax bill for almost $10,000.00. my husband went nuts and called the irs to say what in the world was going on. we didnt have the money so why would they penalize us. well, of course, and you already know what i am going to say, they had no real answer. some clerk, i guess, just picked it up and said hey, these people not only owe capital gains taxes, but now we are going to penalize them for not paying it when they should have. they didnt know the circumstances, and, incidentally, they dont care. you owe it, you owe it, and that is it. he is going monday to get this bs straightened out. we only did what our accountant told us and now he will not return our calls. says something, doesnt it. we will see what happens tomorrow when he goes to annapolis to get this straightened out. hope he deals with someone who knows what is going on, because they say you can ask the same question of ten irs agents and get ten different answers. i am sure that is true.