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Comment by Tangokat | Hacker News Reader

"Wealthy Chinese who want to get around limits on moving money out of China “buy” the $350,000 from Li’s couriers in the U.S. They often use the U.S. dollars to buy real estate or pay for U.S. college tuition. "

You can buy real estate in the US in cash no questions asked? Is that true?

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> A Form 8300 must be filed by any trade or business (including real estate) that receives more than $10,000 in cash in the course of a single transaction or two or more related transactions. It is not a SAR and is not used to report suspicious activity. Form 8300 is an information report that is required to be filed by any trade or business (such as a car or boat dealer) that receives in excess of $10,000 in cash in a single transaction. Therefore, if for any reason a real estate agent or broker receives more than $10,000 in cash from a buyer or seller in the course of a real estate transaction, the form must be filled out and filed, and can be found at http://www.irs.gov/pub/irs-pdf/f8300.pdf(link is external).

https://www.nar.realtor/money-laundering-and-terrorism-finan...

This is also usually how drug dealers get busted after paying cash for a car. It goes to the IRS and then basically every federal agency has it (DEA, FBI, etc)

Ah man. The dealerships do not appreciate a large bag of cash. I found a car that I wanted and got a cashiers check for it at my local bank. They wanted what I considered an outrageous amount of fees (like $8) to do it. So... I asked for cash. Nope - don't have that on hand... will take time, yada yada. At that point, it was the principal of the thing... and said fine, see you in a day or two. Eventually I got it - drove over to pick up the car, and the dealership freaked out. They took it. Filled out all sorts of extra forms. My Bride is correct - I am a dumbass. Won't do that again.

I suspect the "cash" referred in the article are actually 2 distinct things. First being literal dollar bills and the second being bank account balance.

When you buy a house using account balance no actual paper note is involved but it is referred to as "cash".

IRS considers many things beyond currency “cash.” See section 32 of the form where it has you quantify how much value of each of 6 financial instruments were received in the transaction.

If you’re expecting a wire transfer being a loophole, the cash has to get into the bank where the funds exist and they are required reporters for AML/SAR.

$10k seems really low. Like 1980s low. That's not even earnest money on a $1M house typical of California. That's a down payment on a car slightly nicer than a Civic today. Saw a Civic listed for $30k at the dealer last week.

There was a bill to raise it to $30k and reform various other parts of the Bank Secrecy Act that would have likely passed congress but then the Coronavirus hit and derailed the whole thing. Now with this whole Russia-Ukraine thing any effort to sensibly update reporting thresholds will probably never happen.

I think it was set in the 80s as part of the war on drugs.

Yup, and that was the point I think. Set it at a high for the 80s / 50s / etc point and never scale with inflation.

Yes, agents do minimal due diligence on the origins of cash. As long as buyer and seller are happy to make a deal, agents get paid and everyone gets what they want.

A friend of mine who is an interior designer in an affluent area has received calls from clients that go like this:

1. A Chinese couple showed up at their door with a suitcase of cash in the middle of the day offering to buy their house, on the spot. The cash value was about 2x the value of the home.

2. The client declined. They _just_ remodeled, why leave?

3. The Chinese couple gets upset, not understanding why paying 2x for a home on the spot isn't a sweet deal. They leave to go find someone else willing to take the cash to move out ASAP.

Yes. Silicon Valley, Orange County, Seattle, Dallas, Vancouver Washington or Canada.

EB5 visa is $550k minimum to buy a business in impacted investment areas designated by USA.

Don’t you have to show you’ve employed Americans citizens or green card holders? Or is just showing some investment good enough?

Either way - pretty sure it easy enough to fudge the employees too.

Why fudge when you can just buy a mcdonalds as an investment and make clean money on top of it? Or real estate and hire the services of a property manager?

Even better when the "impacted area" your visa is fixing is in midtown Manhattan and you solve the blight by building your own luxury pied-a-terre after moving Harlem 80 blocks south.

Let's say you sell a house for $1MM on paper where in reality you've accepted 2MM more in cash.

There's not much the government can do, but you now have 2MM in cash that you need to hide. The buyer knows you have 2MM, and who knows who they'll tell about it.

Now, if you accepted cash for the full value of the house and deposited it in a bank, then yes, the bank reports it for you, and the IRS - if it is a priority - would look into it.

The IRS got a massive funding boost recently. Let's see how they use the money in the next little while.

Say you deposit the money, let the IRS find out about it, but then just report it on the tax return and pay the taxes - what is the problem?

No problem with that. The reporting happens when you deposit the money. At that point the question is one of, "from whom did you get all this cash and how did they get it?"

Yes OK, but there is nothing illegal there is there? Just wondering what legal tools there are for the police/FBI to interfere. Maybe if they can prove collusion they can confiscate it? Or maybe it's enough to bog one down in trips "to the station" that require taking constant days off or legal fees that become a hassle.

You get added to a suspects list, subject to more audits and investigated, which even if your legit is an unpleasant cost itself, and with the amount of things illegal in reality, could still bust you for something nobody cares about, like having some hunting animal bust from great grandpa or whatever.

no you don't lol

the payer was 123 Main St Trust who just bought the property at 123 Main St

the trade is over, it was compliant

when you make enough money the IRS stops being an adversary and that has nothing to do with how well funded the agents are. most of what the IRS does is not enforcement (in number of distinct roles, not frequency or headcount), it is collaboration with wealthy citizens. sooner you learn that, sooner more doors open up for you.

When your a wealthy citizen who the IRS understands and your integrated with the US political machine, yes, it's just tax paperwork. When your the kind of person with a lot of abnormal imbalances with cash vs. how they understand you, an outsider to the political machine, your audit score goes up and you get a lot more scrutiny in general, because your a high value target to collect more in taxes and such. You get more unpleasant interactions at any government interaction checkpoint. It's bureaucratic, but still unpleasant and could land you jail and to them, it's just another day at the job where the computer machine said to poke you more.

The person we are talking about here is immigrants with dirty cash basically, not doing it properly, a pretty different kind of person in the US gov's eye, and might be drug related, which is a great career boosting lead for their buddies at the DEA.

If you are a recurring subject of high value CTRs or CMIRs I think sooner or later you will get a friendly knock from the guys over at Homeland Security Investigations or maybe you'll notice one day you're being followed when you're driving. You still need to say on whose behalf the transaction was conducted in the form 8300.

It might be alerted as a suspect transaction. Then the eye of Sauron will turn to you.

https://www.fatf-gafi.org/

> how did they get it?

Well if I'm selling a house how am I supposed to know?

Yes, the real estate industry successfully lobbied for exceptions to the KYC/AML laws. Whether we're talking about the Bank Secrecy Act or the Patriot Act.

I’m guessing these transactions occur within the community.

A local realtor/finance company works with these clients.

As someone who has never bought real estate, why not? Is cash not universally accepted as a currency?

It's not about the cash per se, it's big brother wanting to know how you got the money in the first place. If you can show it's all legal and taxes paid then no problem cash is fine. But of course as soon as you mention cash, eyebrows are raised "why would someone want to keep that much cash and not want to put it in a bank if they are all clean?"

Big brother wanting its lion share in everything you earn is the crux of it.

Federal tax. Provincial tax. School tax. Sales tax. Federal sales tax. Tax on fuel. Tax on alcohol. Tax on tax on tax.

Well... At least the infrastructure isn't falling apart and crime isn't rampant...in rich neighbourhoods.

When your an immigrant and your money is from places with bad records, they can't really push too much beyond it, or tax you for money made out of the country where you were not a citizen or resident of the USA. Shitty undeveloped countries are essentially a laundry for cash in general.

Hell even credit ratings don't cross borders.

It would raise a lot of red flags with agencies[0] looking to crack down on using the proceeds of crime. That doesn't mean it can't be done.

[0]https://www.fincen.gov/what-we-do

In America, if you have unexplained wealth, the government can sue your notes and coins.

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