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Will people using crypto to buy/finance houses need to provide documentation regarding the provenance of the funds as well as being in the clear around any tax
by mc32 5y ago
Will people using crypto to buy/finance houses need to provide documentation regarding the provenance of the funds as well as being in the clear around any tax declarations?
If not, there would likely be some who see this as a vehicle to clean up some holdings, depending on provenance.
- j_walter 5y agoI would really love to use some of my crypto that I obtained from mining to pay my mortgage directly. Much less likely to set off alarm bells...
- ahnick 5y agoIs documentation for the provenance of funds, typically required in all cash real estate transactions?
- nradov 5y agoGenerally cash real estate transactions aren't subject to most KYC / AML rules. But the US federal government recognizes that as a problem and is working on tightening enforcement. https://legal.thomsonreuters.com/en/insights/articles/u-s-regulators-tackle-money-laundering-luxury-home-market https://legal.thomsonreuters.com/en/insights/articles/u-s-re...
- JoshTriplett 5y ago> Generally cash real estate transactions aren't subject to most KYC / AML rules. That's not entirely true. The bank wants to know enough information to make sure that the cash came from the buyer, and not from someone else other than the buyer, for AML reasons as well as creditworthiness. So they do seek proof of the provenance of the cash sufficient to demonstrate that it actually came from the buyer. (Source: detailed conversations with bankers when buying a home.)
- toomuchtodo 5y agoProof of source of cash funds in a real estate transaction is required because if the house is bought with illegal drug proceeds, the collateral can be seized by the Feds, leaving the note investors holding the bag. The policy originated in the 80s. https://www.washingtonpost.com/archive/realestate/1989/05/06/lenders-seek-to-avoid-drug-linked-borrowers/93ac6801-d57c-46dd-87ad-24bb49b367c4/ https://www.washingtonpost.com/archive/realestate/1989/05/06... (family member is a mortgage underwriter)
- ipython 5y agoI was required to disclose the source of my down payment funds when purchasing my house. They asked where the funds came from since my bank statement just showed a deposit in that amount in one block. It took a while to convince them that it was not a gift or another loan to pay off.