In these inflationary times, it's awfully hard for younger members of your family to get started with a new home or a new business.

You can help your children or grandchildren by giving them propertyy or even by lending them money to buy it.

You can lend some member of your family the money for a down payment on a home interest free. By making it a "demand" note (payable on your demand), the tax collectors won't hit you with a gift tax if you go over the $3,000 annual limit ($6,000 for a married couple.

Warning: Some state laws might put a time limitation on demand loans, allowing the right to sue for the money.

If you don't sue, then the tax people could conceivably consider your loan a gift. You can avoid this hassle by waiving the time limitation for the note.

You can also buy a small house or condominium apartment for some younger member of your family and lease it back. Part of the rent you charge can go toward building up a fund to cover the down payment when the younger family member buys the home back from you.

By working out one of these lease-purchase agreements with the younger family member, you can reap all sorts of tax benefits. And, the younger family member gets started on the road toward home ownership.

These deals can be tricky, so it's a good idea to have a lawyer help work out the contracts.

The Internal Revenue Service recently said it was going to crack down on taxpayers who rented homes to members of their family -- even though they charged fair market rents.

But members of Congress, responding to appeals from constituents, ordered IRS to lay off the family-rental business. In the new session of Congress, you can look for legislation aimed at protecting the right of families to rent property to sons, daughters, grandchildren and parents.

Another good way to help a younger member of your family, and help yourself to some tax savings, is to lend money or invest it in a small business venture. Money paid out to the young enterpreneur would, of course, not be considered a gift, providing it was within reasonable bounds.

Again, bringing a young member of your family into a business partnership or loaning money to a business venture can be tricky. Best have a lawyer draw up the necessary papers.

If, by chance, you have property that has greatly appreciated in value, you might consider giving some of it to your children or grandchildren. When they sell it, they will have to pay a tax on the profit -- but at a lower rate than the one you would have paid.

Some families have valuable heirlooms such as antique furniture, procelain art objects, silverware and paintings.

If you want to keep these things in the family and avoid big gift taxes on estate taxes later on, you might try giving one or two items away every year.

You can make gifts up to $3,000 a year ($6,000 for a couple) without having to pay a gift tax. Every year you designate what items go to what child or grandchild.

If they're too young and may not be able to care for the valued items, don't let the beneficiaries know you've transferred ownership until later on when they're more mature and responsible. A lawyer can tell you how to make the gifts and how to have the form letters filled in and notarized. h

Q. There are a lot of ads touting diamonds as a good investment. You send in your money, and they pick the "right" diamond for you. If you buy a diamond as an investment is there a regular market for selling them back?

A. Not really. Some companies say they will buy back diamonds from their customers, but it's not a guaranteed deal. They can't guarantee a buy-back because they might not be in business X years from now when you want to sell.

Robert Crowningshield of the Gemological Institute of America says "diamonds are not really a good investment for the small investor." There's no formal market place to sell the stones once you've bought them, and they're all of different quality.

You can get "certificates" with diamond purchases, but these things are nothing more than a formal description of the gems. They do not fix any specific value. Buy daimonds for their beauty, for wearing, but don't buy them for investment unless you have a lot of money and can go for the best.