Give grandparents dividend-paying stocks or stock funds. The grandparents can pay tax at a possible 0% tax rate and use all the income for their living expenses.
The parents reduced their taxable income by $5,000 by giving their parents dividend-paying stocks. Since the parents income was taxed at the 20% tax bracket, the income reduction may decrease their income taxes by $1,000 ($5,000 x 20%).
If you are in a combined (federal, self-employment, and state) tax bracket of 20%, you could reduce your taxes up to $200 for every $1,000 of income reduction by giving your parents dividend-paying stocks or stock funds.