Real Estate Investor · Central, TX · Member since 2012 · 479 posts · 165 votes
13y
Ah, so now we get the rest of the story. It sounds like they are cheating the system and have been dishonest about their assets in order to secure government assistance.
Real Estate Investor · Central, TX · Member since 2012 · 479 posts · 165 votes
13y
You could go to your bank and pull out lots of $100 dollar bills, although I wouldn't feel comfortable doing it. I bought a house a couple of months ago and used a certified check that I took to closing. Find out why they won't take a certified check.?.
Investor · Port Chester, NY · Member since 2012 · 14 posts · 4 votes
13y
The seller receives supplemental security insurance and can only have a maximum of $1,500 in their bank account.
Without me paying in cash, the seller may not want to go through with the deal because they will lose their SSI.
I suggested that the seller setup a trust or have the money deposited into a friend or family member's account and this might mitigate this issue - however the seller has no close family and no friends that could be trusted with the money.
Any other ideas anyone? I really want to move forward with this deal, but this is a roadblock that I am not sure how to get around.
Real Estate Investor · Central, TX · Member since 2012 · 479 posts · 165 votes
13y
Ah, so now we get the rest of the story. It sounds like they are cheating the system and have been dishonest about their assets in order to secure government assistance.
Investor · Port Chester, NY · Member since 2012 · 14 posts · 4 votes
13y
Yes, it is complicated.
I guess what I'm trying to say is that if I give the seller cash and the seller has hurdles beyond the closing such as their SSN showing up on transfer documents, then that becomes their issues...not mine.
My cash would have a paper trail of being withdrawn from the bank. I can do $9,000 withdrawals each day to avoid the IRS form, yet I am still above the table since the cash will appear on the closing docs and it was obtained legitimately.
I am going to try to talk the seller out of cash, but if they insist and wont do the deal any other way, and they understand they are on their own in terms of them getting flagged, and I have fully reported the cash - have I mitigated my risk?
Real Estate Investor · StL, MO · Member since 2008 · 294 posts · 152 votes
13y
It's much easier to run a scam if you're paid in cash, less tracks to cover. Not saying this is a scam, but it sounds pretty fishy. Are you sure they are the actual owners?
If they are legit, what about structuring the sale as a seller financing note? Pay $1,000 a month or whatever so they stay under $1,500 with no interest since you're the one doing them a favor.
Dallas, TX · Member since 2013 · 4k+ posts · 744 votes
13y
Will,
First of all no sellers SSN will ever show on the transfer documents. I think you are more worried about what the bank will say when you are withdrawing a large amount of cash.
Investor · Port Chester, NY · Member since 2012 · 14 posts · 4 votes
13y
I'm 100% sure they are the owner, and I am completely comfortable purchasing the property from them. I just want to make sure I am not going to have any issues with the IRS. It seems that the seller will run into roadblocks.
Paying a monthly amount to the seller is a great idea and may work.
Rockford, IL · Member since 2013 · 330 posts · 62 votes
13y
Who pays for the armed guard.
Seriously, my bank would give me the money in cash but they would be very hesitant to do so and would require notice in advance. Believe it or not most banks now days do not keep large sums of cash on hand. In addition, as I understand it while $10K is a red-flag it is not the only one. Any unusual activity involving cash might trip a flag. Talk to your banker in advance to see that they are aware of the situation.
In addition, make sure you keep a record of the withdrawls, while probably never needed the FEDS do look for large cash transactions
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
13y
You don't care about any IRS red flags, unless you're Not reporting income. The IRS notice may actually "help you" if you're concerned about tracking the cash from your end. 99% of those are never even looked at, and why would you care if they did? The closing agent IS obligated to report the sales proceeds amount under the SS # of the seller.
Investor · Southeast, MI · Member since 2012 · 2k+ posts · 1k+ votes
13y
I'm pretty sure you can withdraw as much cash as you want without the IRS being notified. What do they care? They already know you possess it. It's when you make large cash deposits that the IRS needs to be notified. BTW, my brother used to work at a bank. The bank is REQUIRED to notify the IRS if you deposit more than $10,000 in cash. However, they can notify the IRS for any amount. If you deposit $8,000 and the teller doesn't like you, they might file the form.
As was already mentioned, many banks keep less than $10,000 in cash. If you want more than that, you need to order it a day or two ahead.
This whole deal sounds pretty dubious. I wouldn't be comfortable throwing a seller a garbage bag full of cash. Will a title company be involved, or is this on the DL? What if you give the seller a pile of cash and the deed isn't filled out properly? You might go to the county to record it only to find that more work is required from the seller. Good luck getting any cooperation after your money is gone.
Dallas, TX · Member since 2013 · 4k+ posts · 744 votes
13y
James,
The reason I said that is most pre-paid visa cards only allow withdraw of XX amount per day and I don't think a seller would take a chance on a visa card.
Dallas, TX · Member since 2013 · 4k+ posts · 744 votes
13y
Steve,
You miss the point the seller said he wanted cold hard cash, and everyone is thinking inside the box-like most title/escrow do on doing a double closing. Closed the deal and move on.
Investor · Appleton, WI · Member since 2012 · 1k+ posts · 464 votes
13y
I think you should speak with an attorney to get the rules verified. I recentlt purchased a home from a seller on SSDI. They were not able to do seller financing but had not problem with SSDI getting one lump sum for the sale of their property. They might be confused by the regulations and all this talk of finding and deliever non traced cash to the seller would be unnecessary. Like I said, just did this in June of this year.
Beverly Hills, FL · Member since 2013 · 388 posts · 62 votes
13y
Joe Gore
I got the point, by opening an IRA in their name which is usually done with cash they could draw on it as needed thus the question " Are they allowed money in a IRA in excess of the allowed $1500
Real Estate Investor · Charlotte, NC · Member since 2011 · 252 posts · 56 votes
13y
I think you're being a little too risky. What happens if the government finds out she misrepresented her assets and attempts a clawback? Meaning you may have to give back the property and the lady probably wouldn't return the money to you cause she's need it to pay back all her fraudulently obtained govt assistance.
Banker · Greater Phoenix · Member since 2013 · 32 posts · 5 votes
13y
I work in a bank and many people have misconceptions of what reporting goes where. You can take the cash out without any reporting being done for you. When you go to deposit money back in your account that's a different story.
If you go into the bank to withdrawal 9k at a time, that's called 'unusual' activity and is very suspicious.
It is very obvious when people are avoiding regular CTR reporting. When people are making cash deposits just under the IRS reporting limit, it is called structuring and banks are obligated to report those separately. I would say these are investigated more in dept than CTR's.
My advice would be not to pay in cash. Seller is trying to do something fishy. He is trying to take advantage of someone else by hiding funds. What makes you think he wont take advantage of you? You can give him a cashiers check and he can go cash it himself. You shouldn't take the risk.
Dallas, TX · Member since 2013 · 4k+ posts · 744 votes
13y
Brandon,
The guide is anything $10K and over must be reported. If I went in and draw out $9K, and the bank think that is very suspicious I would close my account and sue the bank and bring in the news media to expose them. So Brandon if Sanford and son Junk business deposit $3K on Monday and $5K on Friday that the bank is obligated to report those separately. Brandon can you cite the banking regulators where it says the bank must report any deposit under $10K.
The guide is anything $10K and over must be reported. If I went in and draw out $9K, and the bank think that is very suspicious I would close my account and sue the bank and bring in the news media to expose them. So Brandon if Sanford and son Junk business deposit $3K on Monday and $5K on Friday that the bank is obligated to report those separately. Brandon can you cite the banking regulators where it says the bank must report any deposit under $10K.
Joe Gore
@Account Closed ,
I believe @Brandon Hughes is referring to the pattern of activity. If a banker sees regular withdrawals or deposits of these amounts and cannot explain it it is reported. That doesn't mean you will know about it.
There is nothing to expose of the bank for doing so. They are simply doing their job to make sure someone isn't laundering money, evading taxation etc.
"Currency activity reports. Most vendors offer reports that identify all currency activity or currency activity greater than $10,000. These reports assist bankers with filing CTRs and identifying suspicious currency activity. Most bank information service providers offer currency activity reports that can filter transactions using various parameters, for example:
Currency activity including multiple transactions greater than $10,000.
Currency activity (single and multiple transactions) below the $10,000 reporting requirement (e.g., between $7,000 and $10,000).
Currency transactions involving multiple lower dollar transactions (e.g., $3,000) that over a period of time (e.g., 15 days) aggregate to a substantial sum of money (e.g., $30,000).
Currency transactions aggregated by customer name, tax identification number, or customer information file number.
Such filtering reports, whether implemented through a purchased vendor software system or through requests from information service providers, will significantly enhance a bank’s ability to identify and evaluate unusual currency transactions.
Funds transfer records. The BSA requires banks to maintain records of funds transfer in amounts of $3,000 and above. Periodic review of this information can assist banks in identifying patterns of unusual activity. A periodic review of the funds transfer records in banks with low funds transfer activity is usually sufficient to identify unusual activity. For banks with more significant funds transfer activity, use of spreadsheet or vendor software is an efficient way to review funds transfer activity for unusual patterns. Most vendor software systems include standard suspicious activity filter reports. These reports typically focus on identifying certain higher-risk geographic locations and larger dollar funds transfer transactions for individuals and businesses. Each bank should establish its own filtering criteria for both individuals and businesses. Noncustomer funds transfer transactions and payable upon proper identification (PUPID) transactions should be reviewed for unusual activity. Activities identified during these reviews should be subjected to additional research to ensure that identified activity is consistent with the stated account purpose and expected activity. When inconsistencies are identified, banks may need to conduct a global relationship review to determine if a SAR is warranted.
Monetary instrument records. Records for monetary instrument sales are required by the BSA. Such records can assist the bank in identifying possible currency structuring through the purchase of cashier’s checks, official bank checks, money orders, or traveler’s checks in amounts of $3,000 to $10,000. A periodic review of these records can also help identify frequent purchasers of monetary instruments and common payees. Reviews for suspicious activity should encompass activity for an extended period of time (30, 60, 90 days) and should focus on, among other things, identification of commonalities, such as common payees and purchasers, or consecutively numbered purchased monetary instruments."