That’s a very interesting question and one that I plan on answering within this post. I will break this down into 2 parts and show you if this if cash gifting is a scam or not.
I have got several emails from people asking me this question, so I thought I would clear the air and give you guys the lowdown on the right way to do this along with the wrong way of doing this as well.
Let’s get started!
What Is Cash Gifting & How Does It Work?
Cash gifting is exactly what its says it is, giving someone cash as a gift and not looking for anything in return. This can be done in many ways whether it be giving cash to:
Family& Friends For
This also includes giving money to charities and various fundraisers and different organizations. This is the way cash gifting is supposed to work. A lot of people like to twist this around and turn it into something it’s not supposed to be. I will go more into that in a few minutes!
Are There Any Benefits Associated With This?
Yes there are a few benefits that come with cash gifting which are:
- You can give up to $1200 each year without having to pay taxes on this money
- You can write this off in your taxes at the end of the year
This is a pretty good chunk of tax-free money that you can legally give away every year and you can even get a portion of this back at the end of the year. How awesome is that? I think it’s pretty awesome and this is a great benefit in itself.
Is Cash Gifting Legal?
As long as you don’t go over $12,000 each year and you are giving it as a gift with no intentions of any monetary gain then yes this is perfectly legal. I was actually surprised as I was doing my research on this and found it in the tax code of the IRS.
The Wrong Way Of Cash Gifting
There’s always someone out there looking to game the system, or trying to find a loophole so they can exploit it. In the last couple of years, there have been many programs popping up that were created explicitly for this reason. If they can run an illegal Ponzi scheme and make it seem like it’s perfectly legal then why not right?
There is a handful of cash gifting programs out there now with more being created all the time. Not only are these programs illegal and extremely risky, the price to buy into them can get pretty darn expensive really fast. There is also NO guarantee that you will make any money at all with them even though they claim it’s guaranteed money.
I have reviewed several programs set up in this matter already and here is the basic concept of how these programs work. They promise you 100% commissions because you will be gifting the whole amount to that person. They go against all the rules of cash gifting and is set up in a pyramid scheme style where you’ll be required to recruit people into their program and have other people do the same.
If you look up the definition of cash gifting on Wikipedia you will see that you get redirected to pyramid scheme automatically.
Check Out This Screenshot Below
Can You Make Money With These Programs?
Yes, there is lots of money you could make with these types of programs. I think the more important question here should be, would you feel comfortable getting your friends, family, and other people involved in an illegal Ponzi scheme? Would you be able to sleep at night knowing that you made a profit from someone else’s misery?
The main reason why these programs were created were to make a lot of money fast. This goes against the whole idea of what cash gifting really is. While some of these programs have managed to stick around for a couple years, many of them get shut down within 6-8 months.
Is Cash Gifting A Scam?
All of the cash gifting programs out there that require you to pay a referral fee in order to join and recruit other people into their program is a 100% flat out scam. As far as the idea itself, NO of course not. Now if you go over the $12k limit for the year, then obviously you’ll need to pay taxes on that money. There is also a whole new set of rules that apply to that as well.
The main reason why so many people get involved in cash gifting programs is so they can make lots of money fast. Anything that promises Instant wealth won’t be around long and you won’t be able to rely on this for years to come. There are much better ways to make money online that actually show you step by step how to build a real business online that will be around for the next 20 years or more.
I really hope that this has cleared a few things up for you guys today about the right way and the wrong way to get into cash gifting. What experience have you had with cash gifting? Was it a good experience or a bad one? I would love to hear about it in the comments below. I will get back to you right away.
Until Next Time!
Your Friend, Scott