1. Cash gifting explained (how it works):
Cash gifting on it’s own is just the process of giving away money to someone else, whether it be a person or an organization as an act of charity basically. When doing cash gifting, the incentive is to give money, NOT receive it.
Think of times when you get/give money:
- Weddings.
- Birthdays.
- Special events.
- Charity.
- Ect…
These are all scenarios where it’s custom for people to hand you an envelope with cash in it. That’s cash gifting in a nutshell.
2. Is cash gifting legal?
Absolutely. It is YOUR right to give away cash. Cash gifting is even recognized in the tax code of the US. I looked into it. As long as the yearly amount doesn’t go over $12,000 (for everyone you give money to), you should be fine.
3. Besides presents, what other benefits does cash gifting posses?
Well it’s not taxable to those you send the money to. A gift is a gift and it is exempt from taxation unless it goes over the $12,000 mark. As for those who actually give away the money as a gift, I believe you can also write this off like you would any donation for things like charity. So besides the receiver of the cash having more money, the other benefits are in the tax department.
4. What about cash gifting programs. Are they legal?
This is where we enter a grey area that often times leads to claims of pyramid schemes and other shenanigans. While I can’t speak for every cash gifting program out there, they have been around for quite some time and in many instances, they are basically loopholes in the system of cash gifting that go around regulations and rules that are set up.
The main idea of cash gifting programs is that people who try them do so to actually make money. When you take into account that the very process of cash gifting is GIVING money, not receiving it, this creates the first major problem.
Now we’re looking at people who aren’t by definition breaking the law, but they are taking an idea that is tax exempt to certain degrees to the limit and beyond. Not only that but if the purpose of cash gifting programs IS to make money, you’re now looking at a operation that can be labeled an investment and/or opportunity which has a totally different set of rules in place.
Cash gifting programs by legal definition aren’t opportunities/investments, but in this rare instance which is being exploited, it IS basically that. I recently reviewed a program called Too Damn Easy which takes this concept to it’s fullest. I didn’t recommend this program to anyone.
5. Do cash gifting programs actually work?
Yes. There’s no question about it. HOWEVER, based on what I’ve seen from the programs I’ve looked into, this is a VERY slippery slope when it comes to making money. And the reason can be found if you look into the business model by which it functions:
How cash gifting programs work (at least the ones I’ve looked into):
- You get referred into a cash gifting program.
- You pay that referrer an X amount of money.
- You are then taught how to promote the same idea to other people, but YOU are the referrer.
- Each time you refer someone into the cash gifting program, you get paid by them, but a piece of the pie flows to either your original referrer OR the person who invented the cash gifting program.
Again, the people who get into these programs do so to make money, not necessarily to give it away, but do it all under the guise of cash gifting. Are you starting to see the problem here? If so, you’re likely to come to the same conclusions I did when I started looking into these things. But there’s also another MAJOR problem…