As difficult as it may be it's important to try to avoid gossip at all costs. I have not yet mastered this skill, but I'm getting better. I'm not a very good mutil-tasker and I find that I need to think about my own life way too much to worry about someone else is doing. There is too much going on that involves me. I don't have the time, energy or interest in thinking about someone else's life. With age comes wisdom and I've found that life is a lot simplier if I just mind my own business. Ignorance truly is bliss.
"Gossip needn't be false to be evil - there's a lot of truth that shouldn't be passed around." ~Frank A. Clark
You also must realize that there is really no difference in spreading rumors, or just listening to them. It takes both participants to call it gossip. If I don't listen, the other person can't tell... and that's where the cycle stops. You might have to interrupt and cut the conversation short, but so be it. It will be less stressful in the long run. After a while, your friends and family will get tired of being rejected (when they have a story to tell) and they will stop coming to you with the latest story. Keep in mind, whoever gossips to you will gossip about you.