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Is it a gift or not?
Part of 'consideration', I imagine, would be the obligation of either party to follow through on an agreement, not only fair market value. Look at the thought experiment from the opposite perspective.  If you did not pay him $150 (maybe just $50 or even $0), would you be breaking a contractual obligation to him?  If he left after 2 hours because he forgot about a family event and did not finish your move, would he be breaking a contractual obligation to you even if you gave him $150? It seems it can be considered a gift (Update: in all cases) There was no agreement of what either party viewed as full consideration in a mutual exchange.   To put it another way: From your examples, there is no evidence that the performance of either party hinged on receiving mutual consideration from the other.  More Updates from comments: Patterns Matter Similarly to how the IRS may determine W2 employee vs independent contractor, patterns do matter.  If your friend has a pattern of helping people move in exchange for tens of thousands of dollars in gifts every year, the IRS would view that in a different light. A waitress/waiter has a pattern of accepting 'gifts' of tips in exchange for good service as a part of their established job duties. If you gifted your friend with $150/week when they watched your kids every Monday-Wednesday, that would be different. You are establishing a pattern, and I would suggest you may be establishing mutual consideration. In that case, consult a professional if you are worried. Amounts Matter This is why the gift tax exemption was created. The IRS does not care about the amounts in question here. It is too much of a burden to track and account for transactions that are this questionable and this small.  You gift your friend with a $20k car? Now you need to pay attention. Consult your CPA. You gift your friend $1k for helping build your new deck? The IRS does not care. Intent Matters Even in the first case, it is not necessarily true that your friend considers $150 to be mutual consideration for his services. Would he open a business where he offers that rate to the general public? I doubt it. He intends to gift you services out of his own free will, not because there will be an equitable exchange of value.  The intent of both parties is to give a gift. There is no evidence that would suggest otherwise to the IRS, it seems, even if they cared in the first place.