Hey,
If you don't mind, I'll separate your questions - it saves me from getting confused (well, moreso than I am usually

)
Is there a limit in practicing generosity?Some people tend to equate generosity with money: "He's generous with his cash/She gives a lot of donations to the charity", but the definition of generosity gives a much wider scope of giving; essentially, being generous is to be unselfish, big-hearted, sharing, humble etc. You use the example of not giving your money and material away, but that's not the whole of generosity - just a small part of it. So, with that in mind, I'd say that there is no limit to being unselfish, big-hearted, sharing etc. - you can be these things 24 hours a day and not lose one cent or any material wealth, you see? Of course, you might "lose" some time through sharing and helping others, but we're all losing time anyway, every second - it's what you do with it that counts. And that doesn't mean you have to necessarily help to dig wells in Africa, or do anything massive like that. Being generous is being there when someone needs you to listen, or washing the dishes for a relative without having to be asked, or cooking a meal for a friend. Little things can just be as significant, if not moreso, than the big acts, you know?
Of course, we shouldn't give all our money and possessions away as that would be going to one extreme, but where is the nice middle of practicing generosity, but still taking care of yourself at the same time?You're right. How can you help others when you don't at first help yourself? You can't help yourself if you give away all you have, because then you need the help from someone who is generous, and if they gave you all their things, they'd be in a poor state and the cycle would never end - you'd be no use to anyone!
Does it all depend on one's motivation when practicing generosity so that even if a person takes advantage of you, you still dedicate the merit of giving to gaining enlightenment for that person and all beings?Of course. The very nature of becoming Buddha is to realise the nature of reality and that, ultimately, we are all interconnected, so you couldn't really say, "I dedicate any merits gained to all sentient beings, except for him over there, because that's three times now that I've loaned him $10, and he still hasn't repaid me grrrr!!!"
Being a Buddhist doesn't mean you become a doormat. If you find yourself being taken advantage of time and time again, you should let go any anger or frustration you feel towards that person, but at the same time, if they come back for a fourth time to ask for $10, you can politely decline - you're allowed to say no, because in the end, you actually aren't helping the person who's taking advantage of you; you increase their dependancy on other people, and you strengthen their attitude that they don't ever have to take responsibility for themselves, because there will always be someone there to catch them if they fall and help them back up.
As for motivation, definitely it's vital to consider when you're doing something. For example, if I say, "I've just given $500 to an animal shelter!", am I doing that to look good, or because I genuinely want to help other animals suffer less? If I'm not doing it to look good, then why am I broadcasting the fact that I've given $500? So yes, the shelter still gets the $500 regardless of my motivation behind it, but ultimately, I don't grow as a person - my compassion, kindness and true generosity doesn't evolve at all.
Does this involve offering every benefit and happiness to other beings while taking upon ourselves all their harmful actions and sufferings?Sure, offer up every benefit and happiness that you can to others, but I'm not so sure (unless you're advanced in your practice) about taking on others' negativities and sufferings upon ourselves. I don't know about you, but I can't handle the pain from a paper cut, let alone think about taking on the sufferings of anyone else!

I'd say, at a basic level (which is where I'm at), it's important to develop compassion, kindness and generosity (in the proper, non-self destroying sense

), and leave the handling of others' harmful actions to more advanced practitioners, until you advance to a higher level yourself. If you can't play golf, you can't teach others how to play golf, right? So similarly, if we struggle to understand and handle our own harmful actions and suffering, how can we realistically expect to hand the actions and sufferings of others?
I hope I've managed to answer your questions relatively well. As with anything, Buddhist practice, or any spiritual practice for that matter, is a progressive thing and competence in practice, understanding, and the application of knowledge, comes with time, commitment and effort (and coffee, if you hope to read lots of books to study!).
Kind regards,
Sandy
