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How to avoid getting taxed on wedding gifts

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  • How to avoid getting taxed on wedding gifts

    My wedding is coming up later this year and we will be having a cash only registry. We anticipate 150 guests and will have a box at the entrance for cash/checks and also an online website (honeyfund) where guests can donate towards. Will the online fund be taxed? The website already charges at 3% convenience fee on all contributions so if the money gets taxed in addition to that, that would just be cruel. Also, is there a way to deposit cash/checks to our bank account without having the bank send the IRS that (>10k deposit) letter and also avoid structuring? Is there a way we can just show the bank that this is our wedding gift money and they don't have to alert IRS? We anticipate at least $70k in wedding gift money (both sides of parents are giving $30k each, and already received >$10k of checks from relatives). If anyone here has had cash only registry, I would love to hear how you deposited the funds into your bank.

  • #2
    The answer is keep detailed records in case of an audit. Prove that these were gifts and not income that requires taxes.

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    • #3
      I have deposited both cash and large checks in my bank without any issues from my bank or the US Trasury.

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      • #4
        There are so many of those >$10k reports daily that it's not a big deal anymore and you've got nothing to worry about. Besides, trying to avoid that report is the very definition of structuring.

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        • #5
          Report your income and gifts (none required) as required. I actually would not even be concerned about detailed records. More concerned about a personal thank you note. IF the IRS even dared to ask, that would be a waste of your tax contributions. "Wedding gifts" would be my response.

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          • #6
            Wow good problem to have!

            Also I do not think you will have a problem. Keep a record just in case.

            Don't spend it all in one place!

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            • #7
              Gifts aren't taxable income. Nobody is sending the IRS a 1099.

              https://info.honeyfund.com/help/will...es-on-my-gifts
              Helping those who wear the white coat get a fair shake on Wall Street since 2011

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              • #8
                Gifts aren't taxable to the recipient and nondeductible to the giver. Kind of like alimony under the new rules. There are certain thresholds for gifts from foreign persons that might be met requiring you to file IRS form 3520. No tax, reporting only.

                Now, when you're up in the stratosphere and gifting millions to others (typically succeeding generations), excess gifts can eat up your unified credit and cause your estate to owe taxes at your death. The current exclusion is $11.7M per person and those folks who are beyond or project to be beyond that limit in the future might consider taking steps to lock in part of the exemption before it drops on 1/1/26. Far beyond the original question, but you never know who it might help.
                Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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                • #9
                  Wish my wedding had had similar types of gifts!

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                  • #10
                    Originally posted by CordMcNally View Post
                    There are so many of those >$10k reports daily that it's not a big deal anymore and you've got nothing to worry about. Besides, trying to avoid that report is the very definition of structuring.
                    Ditto.

                    Annual Currency Transaction Report (CTR) numbers are in the seven (7) figures. Unless you are otherwise being investigated for money laundering, drug dealing, crypto tax avoidance, etc..., this would just be noise in the data mining.

                    As others have pointed out, just document the gifts in case you hit some algorithm flag.

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                    • #11
                      I personally wouldn't worry about doing anything. But if you want to do something I'd make a spreadsheet summarizing the gifts you received and in what form (cash, check, property, etc.). On the very long chance you're audited and auditor is trying to say those cash deposits are actually income you can show them your spreadsheet.

                      All of this is a very low probability of happening.

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                      • #12
                        Deposit the checks electronically. Nothing will happen.

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                        • #13
                          Originally posted by petthezoo View Post
                          My wedding is coming up later this year and we will be having a cash only registry. We anticipate 150 guests and will have a box at the entrance for cash/checks and also an online website (honeyfund) where guests can donate towards. Will the online fund be taxed? The website already charges at 3% convenience fee on all contributions so if the money gets taxed in addition to that, that would just be cruel. Also, is there a way to deposit cash/checks to our bank account without having the bank send the IRS that (>10k deposit) letter and also avoid structuring? Is there a way we can just show the bank that this is our wedding gift money and they don't have to alert IRS? We anticipate at least $70k in wedding gift money (both sides of parents are giving $30k each, and already received >$10k of checks from relatives). If anyone here has had cash only registry, I would love to hear how you deposited the funds into your bank.
                          Who says you have to put it into the bank? And get rid of the online donation site.

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                          • #14
                            3% for what? When you can e-transfer with just an e-mail address. I'd definitely dump that service too. Not that anyone gave us any money when we got married.

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                            • #15
                              Thinking of doing the same for our upcoming wedding. How did you advise guests that wanted to give a gift to just give cash?

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