Is Cash Gifting Legal? – Not All The Time!

When I think of cash gifting, I literally think of gifting cash to others, no strings attached just doing it out of the kindness of helping someone else out.

Nowadays, you have many programs that have played on the idea of cash gifting.

Some are definitely legit, but on the other hand, some are not and play with those words to fool people.

Now one question I have been asked and have even thought of myself is whether cash gifting is legal or not.

In this post, I am going to differentiate between legitimate cash gifts and schemes that are finding loopholes with the idea.

What Exactly Is Cash Gifting?

---

Let’s say you have given money to a relative for there birthday or donated some money to charity.

Now, these are examples of cash gifting, and if you were to ask someone what they think it is, they would say the same thing.

However, while you have that type of cash gifting, which is the ‘norm’ in giving for a good cause or just to help someone out.

You also have cash gifting schemes where you ‘gift’ cash, but this time to get something in return.

Which I’m sure you can understand defeats the object of it all.

But yeah companies exist where if you deposit or send a certain amount of money, that someone else will return the favor.

 

So Is Cash Gifting Legal?

---

If you are just giving money someone money then, of course, it is legal.

But if you are involved in a scheme which you are gifting vast sums of money and looking to get that back and some, then I would argue no.

Every country as its laws when it comes to how much you can give to someone without it being taxed.

Some don’t, for instance, Canada which, as far as I’m aware, doesn’t tax on this.

However, the US has a cap of $14k a year, anything over that, then you will need to pay your dues.

But here’s the thing, if you have a mate and your loaning that person a couple of grand to help them out, there’s nothing wrong with that.

That is where Cash Gifting is legit, and there is nothing wrong with it.

But like I mentioned, companies are built with the idea of gift cash, which is where there are question marks.

 

What Is A Cash Gifting Program?

---

Until not too long ago, I did think that cash gifting was through the above means. 

However, after stumbling across various schemes which are designed in the form of MLM’s.

A cash gifting program is where you sign up, usually under someone’s name, to give money but come out with a profit.

Let me explain how it works, so let’s say person 1 shows you this cash gifting program. 

You sign up and then likely pay a fee.

Now the person one will gain from you because of recruiting you, and now your job is to recruit others.

You have cash gifted, and now it’s up to others to gift you money. 

So you now get in touch with Person 2, 3 and onwards tell them about the same program. 

They join, pay the fee, and so on—the cycle repeats.

Some people will call this a cash gifting scheme. The way I have broken it down it looks more like a pyramid scheme.

That is what I ran to recently with a scheme called Up 2 Give. 

Initially, they were supposed to be philanthropy platform that helps raise money for people around the world. 

But actually, they are just trying to expose people and are conning people into signing up for a top-heavy pyramid scheme.

This is where you have to be careful because in almost every country pyramid schemes are illegal and are considered to be scams.

If there is a product or service involved they become an MLM instead-but if not they are afraid a pyramid scheme.

 

Cash Gifting = Pyramid Scheme?

---

When a system is created solely on recruiting others like the example above, it falls in the pyramid scheme bracket.

Now for it to be anything, but that is hard, as it’s designed to bring other people into it.

And order for someone to make money through a quote on quote cash gifting, they must get someone to join the scheme under them.

That member isn’t joining to help their referral get paid; they just want to get a slice of the pie.

There is a reason why all pyramid schemes are banned because they are only made to take advantage of others and make those at the top richer.

Look at the image below you have those at the top making all the money from the downline, while those at the bottom struggle.

Far more losers than winners with Pyramid Schemes

That is why no one ever succeeds, and over 90% fail to profit. So with no product or service involved, this becomes very shady and illegal as people are not purchasing anything.

Now an MLM works in the same kind of fashion, but the reason why they are legitimate and pyramid schemes aren’t is because recruiting is not the main focus.

For e.g you have Donald Young’s Young Living, this is a MLM that promotes oils however runs a compensation scheme where you can earn money by recruiting others to sell those products.

But if you refer back to that pyramid it is still the same case where only those at the top earn money.

So instead of you earning lots of money you are more likely to lose it.

 

Should I Stay Away From Cash Gifting?

---

By all means give cash to good means and do what you want to do, however just be cautious coming across cash gifting schemes.

There is a big difference between helping people and looking to profit in the long term.

If I gave it to my parents, for instance, I would do it to help them, but I wouldn’t then say next week I want that back and double.

But looking into all these cash gift schemes, the owners seem to set this picture of communities giving to people.

In reality, it’s just lots of people trying to gain from each other, which flips the definition of cash gift on its head.

Now don’t get me wrong there are probably people who join to help others, but then are unfortunately are taking the mickey out of.

So my advice to you is if you come across any cash gifting scheme which in the slightest resembles a form of a pyramid scheme, then I would do a runner.

On the other hand if you are searching for a legitimate way to make money I would recommend this platform I have been using for years.

It’s a much better business model as it’s not illegal nor is it risky to get into.