{"id":6059,"date":"2024-10-18T09:16:42","date_gmt":"2024-10-18T13:16:42","guid":{"rendered":"https:\/\/www.deeds.com\/articles\/?p=6059"},"modified":"2024-10-18T09:16:46","modified_gmt":"2024-10-18T13:16:46","slug":"llc-owners-read-about-the-2024-beneficial-ownership-filing-rule-and-the-2025-reporting-rule-for-cash-home-sales","status":"publish","type":"post","link":"https:\/\/www.deeds.com\/articles\/llc-owners-read-about-the-2024-beneficial-ownership-filing-rule-and-the-2025-reporting-rule-for-cash-home-sales\/","title":{"rendered":"LLC Owners: Read About the 2024 \u201cBeneficial Ownership\u201d Filing Rule, and the 2025 Reporting Rule for Cash Home Sales"},"content":{"rendered":"\n
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This year, the Financial Crimes Enforcement Network (FinCEN) announced a new rule on Transparency in Residential Real Estate Transfers<\/em>. This is important to the owner of an LLC for real estate, and it\u2019s triggered by cash transactions.<\/p>\n\n\n\n

Here are the basics you should know.<\/p>\n\n\n\n\n\n\n\n

Register by New Year\u2019s Day. The New AML Law Becomes Effective in Late 2025.<\/h2>\n\n\n\n

First, know that the Corporate Transparency Act of 2024<\/em> imposes requirements on businesses such as LLCs, and other small corporations that have existed since last year or longer. Your business will need to file certain details with FinCEN \u2014 the Financial Crimes Enforcement Network, part of the U.S. Treasury Department.<\/p>\n\n\n\n

FinCEN began accepting these filings on New Year\u2019s Day 2024. You have until New Year\u2019s Day 2025 to submit your FinCEN BOI<\/a> (beneficial ownership information) form. You\u2019re a beneficial owner if you hold substantial control over, or owns 25% or more of, your company. Once you have filed, you\u2019ll be ready for the next step: reporting home deed transfers for cash or as gifts. Let\u2019s take this one step at a time.<\/p>\n\n\n\n

Small Business Owners, Take Note<\/h2>\n\n\n\n

If you\u2019re forming your company this year, you likely already know about the beneficial ownership information (BOI) form. And you\u2019ve received directions on following the new requirements.<\/p>\n\n\n\n

Otherwise, you might have missed the memo. At Deeds.com<\/em>, we reported<\/a> on it early this year, but the new rule hasn\u2019t been widely publicized yet. And yet, those who don\u2019t do the required reporting risk serious fines.<\/p>\n\n\n\n

Now that you know about the law, here are some questions you might be asking.<\/p>\n\n\n\n

Q. Who\u2019s Exempt?<\/h2>\n\n\n\n

A.<\/strong> Certain businesses are expressly exempted by FinCEN. Sole proprietorships, as well as most partnerships, do not need to file if their businesses are not registered<\/a> with the state.<\/p>\n\n\n\n

Q. What About Single-Member LLCs Opting for Pass-Through Taxation?<\/h2>\n\n\n\n

A.<\/strong> Any business registered with the state, including all LLCs, do need to file, regardless of how they are taxed. And yes, S-corporations do need to file.<\/p>\n\n\n\n

Q. Do I Need Professional Help to File?<\/h2>\n\n\n\n

A.<\/strong> FinCEN offers compliance guidance<\/a> for the small business owner. There are attorneys and companies that will handle your filing, but you can likely do it yourself on the FinCEN website for free. That said, if you have a complicated business with several people who could be defined as beneficial owners, the reporting requirements will be more complex, and you might opt for professional guidance.<\/p>\n\n\n\n

Q. How Much Time Will This Take?<\/h2>\n\n\n\n

A.<\/strong> A few minutes, for most business owners. It can take longer for some businesses, as FinCEN needs to have a state ID on file for each business owner.<\/p>\n\n\n\n

Q. Is Any Follow-Up Required?<\/h2>\n\n\n\n

A.<\/strong> Yes, but only when you make changes to the details you report.<\/p>\n\n\n\n

Q. Is Anyone Opposing This Law?<\/h2>\n\n\n\n

A.<\/strong>  Yes. A pending case is National Small Business United v. Yellen<\/em>. The federal district court in this case issued a declaratory judgment, stating that passing the Corporate Transparency Act<\/em> was an overreach by Congress. While this case plays out on appeal, FinCEN still must implement the law. And businesses not involved in the pending case must comply with the reporting rule.<\/p>\n\n\n\n

Q. How Can I Find Out the Answers to Other Questions I Have About This Law?<\/h2>\n\n\n\n

Please study the Frequently Asked Questions<\/a> webpage published by FinCEN.<\/p>\n\n\n\n

What Next? The Real Estate Report<\/em> Disclosures.<\/h2>\n\n\n\n
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Effective Dec. 1, 2025, FinCEN will have a new rule in place to repel people who try to launder cash through real estate deals. FinCEN is preparing a new disclosure form, called the Real Estate Report<\/em>.<\/p>\n\n\n\n

The government points to bad actors who seek out cash or gift transfers. These deed transfers fly under the radar of banks, which normally apply anti-money laundering rules to large transactions. Holding property in a trust or a company may also make it harder to know who owns real estate.<\/p>\n\n\n\n

This new rule will mesh with the Corporate Transparency Act<\/em> reporting rule we\u2019ve described above. Owners of a company or trust that receive a home deed should make sure that these new disclosure forms are completed and submitted.<\/p>\n\n\n\n

The reporting person must be named, and must disclose these details:<\/p>\n\n\n\n