Legality
Is cash gifting legal?
Yes, cash gifting is legal up to a gift of $12,000 a year to any one person, or, any one person can receive no more than $12,000 each year. Any amount over that is considered ordinary income.
Income and Taxes
Cash gifting is considered ordinary income and you must pay taxes on it if you intend that the income you receive from cash gifting be a source of income or the amount you receive reaches $12,000 or more in any one year.
Is cash gifting a ponzi scheme?
Cash gifting programs or services that you join are most likely a ponzi scheme requiring that existing members get paid only from new members who join.
Is there any cash gifting service or program that is not a ponzi scheme?
There may be, but there is not one that we are aware of.
How can cash gifting be legal?
You can make a cash gift to any person up to $12,000 a year. If that person, or you, belong to a cash gifting service or program, it may be legal, but it could be a ponzi scheme.
I want to make a gift of cash to my nephew (or niece) to pay for college (or some other expense), what do I do?
There is nothing wrong with giving someone money to pay for college or other expenses or as an outright gift. What gets called into question is how it is done. If it is part of a cash gifting service or program, it could be considered income and may be taxable, if it is a gift to a relative or stranger, keep accurate records. The bottom line is to always keep accurate records of the amount you give, to whom and whether or not it is part of any organized cash gifting program or service.
