Is Cash Gifting Actually Legal


 Is Cash Gifting Actually Legal

Cash gifting has been around for quite some time, but it is still a topic of conversation in many circles. There is some confusion and misinformation about this topic, so it's important to know exactly what cash gifting is and whether or not it’s legal.

In the simplest terms, cash gifting refers to giving someone money without any expectation of a return. It includes giving money to an organization from which the donor does not expect anything in return, such as charity organizations. It's basically just transferring money from one person/organization to another without exchanging goods or services.

It's important to note that cash gifting is not the same thing as donating to a charity, which means they are two very different things.


[/arti_popup] [arti_popup id="47"]For example, if you wanted to give $100 to Good Samaritans House in Greensboro, NC for the purpose of helping homeless people in the area with their heating bills this winter, that would be considered a "cash gifting" transaction. However, if you wanted to do the same thing by sending some cash directly to their bank account so that they can pay their utilities during the cold season, that's considered donating and would receive tax benefits on your donation.

In order to legally give money to a non-profit organization, you must be able to prove that the donation is intended to go directly toward a particular purpose (e.g. the homeless) and not toward any of its other "non-charitable" purposes (e.g. paying overhead, keeping overhead, or paying salaries). This means that if you wanted to donate your money to Good Samaritan House without intending for every dollar of it to go toward reasons other than helping homeless people in Greensboro, then you would have to contact the IRS before doing so. This is not cash gifting per se.

On the other hand, if you wanted to give $100 directly to homeless people in Greensboro, that would be considered cash gifting. The IRS and Financial Crimes Enforcement Network (FinCEN) see a distinction between donating money to a charity and giving money away for personal reasons. So you can't give your hard earned cash to someone who needs help as a way of getting a tax deduction (i.e., doing so is not tax deductible).

If you want to gift money to a charity and are concerned about the legality of the act, it might be a good idea to contact the charity yourself first and ask them directly if they will accept your donation. It's always better to be safe than sorry when it comes to tax laws! You can view a list of IRS approved non-profits at this link.


How can you avoid being investigated by the IRS for cash gifting when giving money away? Don't have an "I just want to start up a church" mentality. If you are trying to give away your money for personal reasons, then it's not legally considered cash gifting.

Having said that, the IRS and FinCEN have put out official guidance that gives examples of situations in which cash gifting is considered acceptable and where it's not. The following are some examples of legal cash gifting situations:

Families giving money to other family members for weddings, bar mitzvahs and other special occasions;

Gifts given from one family member to another who have been gifted previously by that family member; or

Gifts of a certain amount between friends or coworkers. These can be for birthdays, holidays, etc.

If you give money away to someone in any of these scenarios, you won't be investigated by FinCEN or the IRS for doing so. However, if there are other reasons for your gifting (giving your family member money because she/he is in trouble with the law, etc.), that would be considered illegal cash gifting.

Cash gifting has been a popular trend for years because people like to have more control over how they want their money invested and gives them more freedom. For example, when you buy stocks you have no control over the company’s direction or what business decisions it chooses to make; giving your money away is a way of having full control over where and how it is invested.

Unlike with a traditional gift, you can also give away money in order to show someone how much you love them or how grateful you are of their friendship or kind deeds. It's important to remember that cash gifting is not the same thing as donating. Donating is giving money toward a certain cause while gifting means giving it without an expectation of any return on your investment.


One of the primary reasons why people love to give cash away is because it doesn't require any special effort such as shopping, wrapping, shipping or finding a gift card. You simply go to your bank and transfer money to someone else’s account, and that's it. You don't even need to remember their name or put any thought into finding the perfect gift.

You also have no financial obligation to give that person anything, so you don’t have to worry about making a donation every month or putting a lump sum amount into an Investment account with a broker to gain interest. This is one of the primary reasons why people love giving gifts of cash.

Cash gifting is a very popular way for people of all ages (from teenagers up through elderly retirees) as well as religious groups and non-faith based organizations such as animal shelters, food banks, etc. to give money away. It can be a great way to start up a small business over time by gifting money to friends over time and gaining interest on it by keeping the money in cash.

You also have the option of gifting a percentage of your salary as a way of starting up a business; this is known as wage gift giving. If you are self-employed and you have colleagues who desire equity in your company, then wage gifting is one way to do so without having to worry about selling assets such as stock options or selling off pieces of your company.


If you want to cash gift some money on someone’s birthday, you can just send them a check in the mail (or if you online banking, just withdraw it directly from your bank account) that is marked "cash gift" and put as much as they want into an account they specify or just leave it in their name at their request. The money will not be considered taxable income for them because it is not considered an installment sale that has been paid for in advance, so there are no state or federal sales taxes due. You would only owe taxes on the dollars you have consumed themselves which would be subject to your regular tax rate based on your tax bracket.

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