Real Estate Pros Must Report Residential Cash Sales Under New Anti-Money Laundering Rules

What's New?

Effective this month, real estate professionals must report cash purchases of residential real estate that are $30,000 or more. This reporting requirement is part of the Anti-Money Laundering Act of 2020, which aims to prevent money laundering and terrorist financing.

Who is Affected?

The new reporting requirement applies to real estate brokers, agents, and title insurance companies, as well as attorneys who close real estate transactions. As a licensed real estate professional, you are considered a "covered business".

What Must be Reported?

Covered businesses must report the following information to FinCEN (the Financial Crimes Enforcement Network) within 15 business days of closing the sale:

• Name and address of the buyer
• Name and address of the seller
• Amount of the cash purchase
• Date of the closing
• Property address

How to Report

Covered businesses must report the required information electronically through FinCEN's website:https://www.fincen.gov/msb

Penalties for Non-Compliance

Failure to comply with the reporting requirement could result in civil penalties of up to $500,000 per violation and criminal penalties, including imprisonment.