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I am looking into 2 scenarios:
1. Send them $100,000 this year, and then in later years some smaller amounts.
2. Send them each year $60,000.
If you give each of your parents any amount over $12,000 (for 2008) you must report the amount over $12,000 ($26,000 for both parents) on Form 709, United States Gift Tax Return (www.irs.gov/pub/irs-pdf/f709.pdf) . No tax is due on the gift until your lifetime gift tax exclusion of $ 1 million is use up. If you give your parents $100,000 for 2008 you will have to report a gift in the amount of $74,000 (100,000 - 26,000 = 74,000). If you are married your exclusion will be $24,000 for each parent and you would have to report a gift in the amount of $52,000. You can read more about gift tax at www.irs.gov/newsroom/article/0,,id=107815,00.html