It will be harder for the IRS to argue that it was really a gift. n Don't make a loan the borrower has no realistic chance of repaying.

FORBES: Sue your sister!

The Tax Court has said that's a gift. n If you didn't plan to forgive a loan, but find a relative can't repay you, don't just let the bad loan sit there.

FORBES: Sue your sister!

With a demand loan, you recognize each year's forgone interest as a gift at the end of that year. n Even if you intend from the start to begin forgiving a loan annually, show at least some history of repayment first.

FORBES: Sue your sister!