Starting December 1, 2025, a new federal rule will fundamentally change how cash real estate transactions involving entities and trusts are handled. If you use LLCs, land trusts, living trusts, or other entities for real estate investments, this rule will likely affect you.

Here's what you need to know to stay compliant and avoid significant penalties.

The Financial Crimes Enforcement Network (FinCEN), part of the U.S. Treasury Department, has finalized a nationwide reporting requirement that takes effect December 1, 2025. For years, FinCEN has been concerned about money laundering through U.S. real estate, particularly through all-cash deals into anonymous LLCs and trusts.
​After testing geographic targeting orders in cities like Miami and New York and finding substantial suspicious activity, FinCEN made the decision to implement this rule nationwide.

The rule applies specifically to residential real estate transactions, including:

A transaction must meet ALL of the following conditions to trigger reporting requirements:

Non-financed means the transaction doesn't involve credit extended by a financial institution subject to anti-money laundering requirements. This includes:

If you're using a traditional bank or mortgage broker with anti-money laundering programs, the transaction typically won't be subject to this rule because they're already reporting to the federal government.

Not all transactions require reporting. Here are the key exemptions:

If you already own a property and transfer it for no consideration into your living trust or land trust where you are the grantor, this transfer is exempt. This is one of the most important exemptions for real estate investors.

You typically won't file this report yourself. The "reporting person" is usually:

These professionals must file a new "Real Estate Report" electronically with FinCEN that includes:

You'll need to provide this information and sign a certification that it's accurate, but the closing professional handles the actual filing.

Example 1: Buying Property in Your Living Trust
You purchase a property for cash, taking title in your living trust. This is a covered transaction. If it's not financed and a closing professional handles it, they must file the real estate report.

However, if you already own the property and transfer it into your living trust (no sale, just a transfer), this is exempt under the trust exception.

Example 2: Buying Property in an LLC
You buy a property for cash in your LLC's name. This is a covered transaction requiring reporting by the closing professional.

If you bought it with a traditional bank loan instead, it likely wouldn't be reportable because the bank already has anti-money laundering requirements.

Example 3: Transferring Existing Property to an LLC
You transfer property you already own into an LLC or land trust. This is a covered transaction, but reporting is only required if a reporting person (title company, attorney) is involved.

​If you draft and record the deed yourself, there's technically no reporting person, so no report gets filed. However, this approach can create other risks like title insurance gaps or recording issues.

Mark Your Calendar
​December 1, 2025 is when this rule takes effect. Any covered transactions from that date forward will require reporting.
​
Be Prepared
​When closing on properties using entities or trusts, be ready to provide:

Understand the Differences

Work With Your Closing Agent
​Don't fight the reporting requirements. Closing professionals face significant penalties for non-compliance, and they're required to collect and report this information.

Penalties for non-compliance start around $1,300 but can exceed $100,000 for patterns of negligence. Willful violations can result in criminal charges. This is why closing professionals will take these requirements very seriously.

An important clarification: this reporting does not eliminate your privacy from the general public.

The information goes to the Treasury Department, which already receives your tax returns if you own investment properties. This is not public record information. The general public cannot access these reports, just as they cannot access your tax returns.

​You still maintain anonymous ownership to the rest of the world. The government simply wants to know the ultimate beneficial owners to combat money laundering by bad actors.

Absolutely not. Continue using LLCs and trusts for their intended purposes:

The only difference starting December 1, 2025, is that certain transactions will come with reporting obligations. In most cases, someone else (your closing professional) will handle the reporting.

If you want to minimize reporting triggers:

This rule is part of a larger trend over recent years where the U.S. government is working to eliminate anonymity in real estate transactions to combat money laundering. While this affects legitimate investors and business owners, the primary target is bad actors using real estate to hide illicit funds.

​Like the Corporate Transparency Act before it, there may be legal challenges to this rule. The requirements could change, be modified, or even be eliminated. We'll continue monitoring developments and keeping our clients informed.

If you're uncertain about how these rules apply to your specific situation, or if you need help structuring your real estate holdings to maintain compliance while maximizing protection and tax benefits, we can help.

​We work with real estate investors nationwide to:

The key is understanding these rules and planning accordingly rather than being caught off guard at closing.

Starting December 1, 2025, cash purchases of residential real estate using entities and trusts will trigger federal reporting requirements in most cases. The closing professional typically handles the filing, but you need to be prepared to provide detailed ownership information.

Key exemptions exist, particularly for transfers of existing properties into grantor trusts. Continue using entities and trusts for their protective and tax benefits, but understand that the days of complete anonymity from the federal government are over.

​Most importantly, work with qualified professionals who understand both the rules and the available strategies to structure your real estate holdings effectively.

Have questions about how this rule affects your specific situation? Contact Business Structuring Secrets, LLC to discuss your real estate structuring strategy and ensure you're positioned for compliance while maintaining maximum protection and tax efficiency.