Is Cash Gifting Really a Legal Activity for Generating Cash Flow?

Since it’s inception, the Internet has provided many to enter into their own business and/or work from home with the potential of creating financial wealth. There are thousands of opportunities in the vastness of the world wide web, but there is one that is taking the Internet by storm; that is cash gifting. Unlike most opportunities where the question of legality is usually settled, there is a question I receive the most and that is: Is cash gifting legal?

I also had this same concern when I first saw cash gifting as an opportunity. As a former accountant, that ran my own practice for 9 years, it seemed odd just giving money and not expecting a product or service in return. I knew that giving cash gifts were acceptable in many circles, because, also, as a pastor, I know that is how the church is financially sustained; by the giving of the congregant. Plus, over the years I have supported many ministries and charitable organizations financially. Not only that, there are many times when people would walk up to me and hand me cash as a gift to bless me. Actually, it happened twice this last Sunday, when I received $120 from two different individuals. Now, is this illegal? Of course not! But my question continued, is a cash gifting activity legal?

So, to do my homework, I set out to settle this nagging question once and for all.

First, as an accountant, I researched the tax laws. I learned that both, American and Canadian citizens, and other citizens around the world have the right to gift property, cash and other assets. The U.S. gifting rules are found in the IRS TAX CODE, Title 26, Sections 2501-2504 and 2511.

And just know that those rules are focused on the tax liability of cash gifts. Of course, you should always consult your CPA or Tax attorney for a full and comprehensive review and advice about how to treat cash generated from gifts in your specific tax situation.

By reading the law, you will find that one or more individuals can give a gift to another individual up to $12,000 each per calendar year without any tax liability to either the giver or receiver of the gift. This is because the giver is using “after tax” cash to make the gift. In other words, the tax on that money is assumed to have already been paid.

Secondly, to make a cash gifting activity legal it must be properly structured. A properly Structured Cash Gifting Activity is NOT PYRAMIDAL in structure. There is no “fat cat” at the top benefiting from others. A person starting today can easily generate more money than some other person who has been in for more than a year. It’s strictly between you and the person who you invite to learn about your cash gifting activity and sharing club. If they like the concept, they may agree to give you a cash gift. Direct. Person to person. No pyramid anywhere.

In the past, most cash gifting programs were structured with an attempt to copy or “clone” the current “multi-level marketing” type of compensation plans. There were weird “cycling” systems where the new gifter would be required to invite a number of new enrollees before they were “ranked” and able to receive any gifts themselves…

Other programs were structured using “Matrix”, “Binary”, or other complicated form of “multi-level marketing” style of compensation programming. These types of structures are improper to Cash Gifting and potentially illegal.

There is a big difference between that old type of cash gifting activity structure, and the current properly structured activities.

In today’s properly structured activities there are no ranks, no cycling, or no positions. You as a member of a private sharing club invite others to learn about the activity. When a person you invite decides to join they gift you directly. No fat cats, no middlemen, nobody else ever touches the gift. It goes directly from the giver of the gift to the receiver of the gift.

After these considerations, I determined that cash gifting is legal, moral, a great way to generate cash flow and it’s for me. Additionally, in these current difficult economic times, I realize the power of cash gifting. Through this activity, it can help many individuals and families meet their needs and create a path that can lead them to financial security.

About the Author

Greg Fox is an associate pastor, Bible teacher, and conference speaker. He has also have been in business for over 20 years and been in web development and programming since 1996. Greg was a leader in the network marketing/MLM industry and was a leading recruiter in his chosen company. Kaline is a housewife, helps in the ministry and home school teacher of our 4 children. Click here to can find more information

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