Dear Harry: My wife and I want to help our son and his family get ahead of their financial problems. The recession left him out of work from fall 2008 until last July. They have used almost all of their savings. Our plan is to give him and his wife $13,000 each to help get their mortgage and the payments reduced. The mortgage lender has said that they will use any principal payments to reduce the size of the monthly payments rather than the number of payments. This will enable us to continue to help with the mortgage by assuming the payments each month. Do we write a separate check to each? I understand that the $13,000 is tax-free. How do we report the amounts on our income tax returns?

What Harry says: Your plan is a good one. However, like many others, you seem to be confused about the nature of the $13,000 per recipient, per year exclusion. It refers to the gift tax, not the income tax. There is no income tax deduction for these gifts; nor is there any income to be reported by the donee. I do not know about your total assets or income, but there is another move you may consider. You may give your son and his wife a gift of up to $13,000 each in every calendar year. Your wife can do the same. This effectively doubles the exclusion to $52,000 per year. Thanks for bringing up the possibility of using lump-sum mortgage payments to reduce the monthly payments rather than the number of payments.

Write Harry Gross c/o the Daily News, 400 N. Broad St., Philadelphia, PA 19130. Harry urges all his readers to give blood - contact the American Red Cross at 800-Red Cross.