LLC Owners: Read About the 2024 “Beneficial Ownership” Filing Rule, and the 2025 Reporting Rule for Cash Home Sales

This year, the Financial Crimes Enforcement Network (FinCEN) announced a new rule on Transparency in Residential Real Estate Transfers. This is important to the owner of an LLC for real estate, and it’s triggered by cash transactions.

Here are the basics you should know.

Register by New Year’s Day. The New AML Law Becomes Effective in Late 2025.

First, know that the Corporate Transparency Act of 2024 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 — the Financial Crimes Enforcement Network, part of the U.S. Treasury Department.

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

Small Business Owners, Take Note

If you’re forming your company this year, you likely already know about the beneficial ownership information (BOI) form. And you’ve received directions on following the new requirements.

Otherwise, you might have missed the memo. At Deeds.com, we reported on it early this year, but the new rule hasn’t been widely publicized yet. And yet, those who don’t do the required reporting risk serious fines.

Now that you know about the law, here are some questions you might be asking.

Q. Who’s Exempt?

A. 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 with the state.

Q. What About Single-Member LLCs Opting for Pass-Through Taxation?

A. 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.

Q. Do I Need Professional Help to File?

A. FinCEN offers compliance guidance 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.

Q. How Much Time Will This Take?

A. 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.

Q. Is Any Follow-Up Required?

A. Yes, but only when you make changes to the details you report.

Q. Is Anyone Opposing This Law?

A.  Yes. A pending case is National Small Business United v. Yellen. The federal district court in this case issued a declaratory judgment, stating that passing the Corporate Transparency Act 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.

Q. How Can I Find Out the Answers to Other Questions I Have About This Law?

Please study the Frequently Asked Questions webpage published by FinCEN.

What Next? The Real Estate Report Disclosures.

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.

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.

This new rule will mesh with the Corporate Transparency Act reporting rule we’ve 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.

The reporting person must be named, and must disclose these details:

• The identity of the transferee — that is, the company or trust receiving the deed, and the identity of its beneficial owner(s).

• The identity of the transferor.

• Certain parties who sign documents for either or both of the above parties.

• What property is being transferred.

• The closing date, and information about payments made by the party receiving the deed, including any non-bank lenders.  

Only one person needs to file per real estate transaction. The reporting person should be the professional handling the deed transaction (usually a settlement agent). The reporting person must submit the form to FinCEN, and must also keep a copy on file for five years.

How soon does FinCEN need the Real Estate Report filing? The reporting person must submit it by the end of the month after the month when the deed transfer happened, or 30 calendar days after closing day — whichever date comes last.

What Kind of Real Estate Is Subject to the New Reporting Rule?

As long as a “reporting person” is involved in the transaction, the rule applies to transfers of:

• Stand-alone homes, townhomes, condos and co-ops.

• Condos and co-ops in large buildings made up of many housing units.

• Residences located above storefronts.

• Buildings designed for one to four households.

• Vacant land (excepting easements) where the deed recipient will build one to four housing units.

But FinCEN created no obligation to report:

• A deed transfer to the qualified intermediary in a § 1031 exchange.

• Transfers under court supervision, and transfers involving a bankruptcy, or the dissolution of a marriage or civil union, estate planning, or the death of a person.

• A transfer for no money into a trust which the transferor (joined by a spouse, or individually) has established.

Check the FinCEN website for further details and relevant materials, including court updates. Note that some of the law’s details have changed since we last reported on it. FinCEN says it’s taking public responses into account.

At the End of the Day…

Money laundering impacts us all. Money laundering schemes that use all-cash home purchase deals are hurting the people who are just trying to buy homes to live in. Regular buyers have a hard time competing with cash offers.

So, the new reporting rules are meant to help the people who are doing things right by deterring wrongdoers.

What we’ve covered above is just a general overview of these new reporting rules. We cannot offer financial or legal advice. Small business owners with case-specific questions should consider speaking with an attorney before submitting reports.