How is money gifted through Cash App taxed? Tax implications for inheritance gift?

The good news is that generally, gifts you receive aren't considered taxable income to you as the recipient. You won't need to report this on your tax return regardless of how you receive it. The gift tax is actually your aunt's responsibility, not yours. However, there's an annual gift tax exclusion of $18,000 per recipient for 2025 (it was $17,000 for 2024). This means your aunt can give you up to $18,000 this year without having to file a gift tax return or pay any gift tax. Since she's giving you $15,000, she's under that threshold and doesn't need to worry about gift taxes either. As for sending it in smaller chunks through Cash App - that's unnecessary from a tax perspective. There's no tax advantage to splitting it up. The IRS looks at the total amount gifted in the calendar year, not individual transactions.

After my divorce last year, I was in a similar situation with money from my parents. I was totally confused about gift taxes until I found taxr.ai (https://taxr.ai) which cleared everything up. You upload your tax documents or just ask questions about your situation and it gives you really clear answers based on current tax laws. For your situation, they'd confirm what the expert above said - gifts aren't taxable to you as the recipient. But they also help with documenting everything properly just in case you ever get questions. It saved me so much stress when I was trying to figure out if I needed to report the money my parents gave me to help with my down payment.

Ok I take back what I said about taxr.ai. I was super skeptical but tried it anyway since I was confused about a similar gift situation with my grandparent's estate. It actually clarified everything about the difference between inheritance (not taxable to me) versus gifts (also not taxable to me, but potentially reportable by the giver). The tool even explained how the lifetime gift exemption works in relation to the annual exclusion, which none of the random internet advice I found made clear. Really helpful for understanding the whole picture instead of just partial answers.

If you're trying to reach the IRS to confirm gift tax rules, good luck... I spent HOURS on hold last month trying to verify something about inheritance taxes. Finally found Claimyr (https://claimyr.com) which got me connected to an actual IRS agent in about 20 minutes. They have a demo video here: https://youtu.be/_kiP6q8DX5c that shows how it works. The IRS agent confirmed exactly what others are saying here - gifts under $18,000 aren't taxable to either party and don't need reporting. Over that amount, the giver (not receiver) needs to file a form but still likely won't owe taxes unless they've given away millions over their lifetime.

I can't believe I'm saying this, but I tried Claimyr after posting my skeptical comment. It actually worked! Got through to the IRS in about 35 minutes (longer than the 20 they advertised but WAAAAAY better than my previous 3+ hour attempts). The agent confirmed gifts under $18,000 don't need to be reported by either party. She also mentioned that using Cash App is fine, but your aunt should keep records of the transfers in case there are ever questions. The agent also said splitting it into smaller amounts could potentially look suspicious (like trying to avoid reporting requirements), so it's actually better to just do it as one transaction if possible.

Just want to add something important about Cash App specifically - make sure your aunt sends it as a personal payment and NOT marked as "for goods and services." Cash App reports to the IRS when you receive over $600 in business transactions, which can create confusion even though gifts aren't taxable income. Also, some payment apps have different terms in their user agreements about large transfers. Your aunt might need to verify her identity with Cash App before sending larger amounts.

My tax guy told me there's also something called "bank structuring" where if u deliberately break up deposits to avoid reporting, that can get u in trouble. Like if ur specifically doing $2,500 payments to stay under some reporting limit. Not worth the risk imo.

I'm sorry for your loss, Isabella. Dealing with finances after losing a parent is never easy, and it's smart that you're asking these questions upfront. Everyone here has given you solid advice - the $15,000 gift from your aunt won't be taxable to you, and since it's under the $18,000 annual exclusion limit, she won't have any tax obligations either. One thing I'd add is to keep good records of this gift for your own files. While you won't need to report it on your taxes, it's always good to have documentation showing the source of the money in case you ever need it for things like mortgage applications or other financial situations where large deposits might be questioned. Also, regarding your student loans - make sure you understand how receiving this money might affect any income-driven repayment plans or financial aid if you're still in school. Generally gifts don't count as income for these purposes, but it's worth double-checking with your loan servicer if you have any special circumstances. Your aunt sounds wonderful for wanting to help you during this difficult time. The money will be much more useful going toward your education than sitting in smaller chunks trying to avoid non-existent tax problems!

I'm really sorry for your loss, Isabella. Losing a parent is incredibly difficult, and it's completely understandable to feel overwhelmed by financial questions during this time. The advice you've received here is spot-on. As the recipient of a gift, you won't owe any taxes on the $15,000 your aunt wants to give you, regardless of how it's transferred. Your aunt can give you the full amount at once without any tax consequences since it's well under the $18,000 annual gift tax exclusion for 2025. One additional consideration: if you're receiving any need-based financial aid or benefits, you'll want to check whether receiving this gift could affect your eligibility. While gifts generally don't count as income, some programs have asset limits that could be impacted by suddenly having $15,000 in your account. Also, when your aunt sends the money through Cash App, she should make sure it's sent as a personal payment (not for goods/services) and consider adding a note like "gift" to create a clear record. This helps avoid any confusion down the line. Your aunt's generosity during this difficult time is truly touching. It's wonderful that she wants to help you with your student loans - that money will make a real difference in your future financial stability.