Down Payment Paid in Full with Cash - Dilemma

[nickbn]

What is the name of your state (only U.S. law)? California


I have a significant other who doesn't believe in depositing their work paychecks into a bank, and have always converted them to cash. They have been doing this for 5+ years and has amassed $50k+ in cash. I on the other hand have been working and saving up via my paycheck (direct deposited).

We are now now thinking about buying a house, since I have a good credit rating and about half the down payment in my bank account (50k). My significant other has the other half of the down payment (50k).

1. How do I go about paying the full down payment in cash without raising any IRS/bank suspicions (Form 104, when more than 10k deposited)? Are housing down payments safely accepted in full/cash from broker or owner? We are first time buyers and do not know all the in-and-outs of home-buying.

2. Was thinking about depositing my other's half of the money into my bank, as I have the credit and will be purchasing the house for us, but this would raise unnecessary suspicions.

3. I thought about cashiers checks, but wouldn't you also have some explaining to do with multiple small increments going into your account (e.g. 2k, 2k, 3k, 1k)...

I don't want to go through the mess of audits or explaining or proving where all the money came from (paycheck stubs are gone). So I'm really confused as to what the best route to go, as we are both couples who have earned an honest living from paycheck to paycheck.

Please keep in mind I am seeking legal ways to do this. We are not criminals and this is hard earned money that we don't want to be taken from us due to some misunderstanding and simple inability to prove source of funds.What is the name of your state (only U.S. law)?

 

[thedoctorisin]

Are housing down payments safely accepted in full/cash from broker or owner?

No. Down payments are in the form of a cashier's check from a bank. If the exact amount of the closing costs is not known in advance, the real estate closing attorney will usually take a cashier's check for the estimated closing costs and a personal check for the difference calculated at closing.

 

[thedoctorisin]

Please keep in mind I am seeking legal ways to do this. We are not criminals and this is hard earned money that we don't want to be taken from us due to some misunderstanding and simple inability to prove source of funds.

So what's the problem with filling out Form 104? This form is different than a suspicious transaction notification. The instructions say:

This Currency Transaction Report (CTR) should NOT be filed for suspicious transactions involving $10,000 or less in currency OR to note that a transaction of more than $10,000 is suspicious. Any suspicious or unusual activity should be reported by a financial institution in the manner prescribed by its appropriate federal regulator or BSA examiner. (See the instructions for Item 37). If a transaction is suspicious and in excess of $10,000 in currency, then both a CTR and the appropriate Suspicious Activity Report form must be filed.​

 

[20pilot]

Sorry buddy, you have a major problem. No matter how you go about it, you will raise a red flag. No matter what you do, you can not use the money for a down payment. The loan originator wants to know where the money came from. They want to know it is your money and not a loan from your buddy, a loan from a loan shark or proceeds of a criminal enterprise that the government is about to seize.

You are talking about missing pay-stubs. What about tax records? Did she pay taxes on it? Did she file federal and state income taxes? If not, she is some really serious problems.

Also keep in mind, that proactively trying to hide cash deposits is a crime as well and you could be looking at criminal liability even if there is no allegation of wrongdoing regarding the origins of the money.

 

[justalayman]

well, not sure where the other folks have been but IF the broker will accept the cash, it is quite legal to do so. I know of a woman that brought in cash for a purchase of a home.

Last I knew, cash is an acceptable form of payment for all debts.

the form 104 is going to come into play when the broker deposits the money in the bank.

This very well can cause you some problems because the broker may be asked where they received such a large amount of cash from and of course, they are going to point at you. You need to speak with your bank and ask them the easiest way to deposit the money that will cause you the least problems. In todays world where drug sales and other illegal activities deal in cash, such a large amount will very likely raise a few eyebrows. (not suggesting you are involved in such)

as to the allegations 20pilot tossed out;

You are talking about missing pay-stubs. What about tax records? Did she pay taxes on it? Did she file federal and state income taxes? If not, she is some really serious problems.

did you read? OP said the person converted paychecks to cash. This, in itself would not cause any legal problems. You seem to be jumping the gun here with absolutely no information to believe anything illegal has been done.

Also keep in mind, that proactively trying to hide cash deposits is a crime as well and you could be looking at criminal liability even if there is no allegation of wrongdoing regarding the origins of the money.

proactively trying to hide cash deposits? What's that about? The person was paid in check and cashed the checks rather than deposit them into a bank.

Nobody is talking about hiding any cash deposits.


Now, of course there could be illegal actions taking place but based on the info provided, there is nothing shown here that would be.


other than that, I would like to add a few things:

becoming co-owners of a house without the benefit of marriage is a very risky endeavor. If you split, the house situation will cause you all sorts of grief.

it is foolish to maintain an carry such large amounts of cash. If you were to be robbed, no insurance company is going to believe you and you will simply be out the money. If anybody is aware you have such large sums of cash, you become a very attractive destination for criminals.

ever read the book; In Cold Blood?

 

[HomeGuru]

To the OP- good luck.

 

[20pilot]

proactively trying to hide cash deposits?

It is called "structuring" and it is a federal felony. Here's an article, if you care to unserstand the facts, rather than getting others in trouble because of your ignorance: My Big Fat IRS case - Forbes.com

 

[Cedrus]

I am curious about the full price of the home you are considering. If $100K is the down payment, what % of the home price is that?

Why not a lesser down payment and once the house payments start, make extra interest/principal payments, early and often?

 

[HomeGuru]

I am curious about the full price of the home you are considering. If $100K is the down payment, what % of the home price is that?

Why not a lesser down payment and once the house payments start, make extra interest/principal payments, early and often?

**A: that's too simple. The OP is dealing with structural integrity or lack thereof.

 

[justalayman]

It is called "structuring" and it is a federal felony. Here's an article, if you care to unserstand the facts, rather than getting others in trouble because of your ignorance: My Big Fat IRS case - Forbes.com

sure, it would be this law right here:

US CODE: Title 31,5324. Structuring transactions to evade reporting requirement prohibited

the OP brought about several methods but discounted them as being problematic. In fact, OP posted this:

Please keep in mind I am seeking legal ways to do this.

So I took it that OP did not want to engage in illegal activity. You, on the other hand seemed to imply that that is what they were attempting to do.

pilot20

Also keep in mind, that proactively trying to hide cash deposits is a crime as well and you could be looking at criminal liability even if there is no allegation of wrongdoing regarding the origins of the money.

so I responded with:

proactively trying to hide cash deposits? What's that about? The person was paid in check and cashed the checks rather than deposit them into a bank.

Nobody is talking about hiding any cash deposits

While you apparently believe the OP intends on committing a crime, I see it as they are attempting to avoid committing a crime.

So, how about showing me the law where it is illegal to deposit $50k in your account.

 

[HomeGuru]

good one**************

 

[20pilot]

The OP talked about a number of things including several cashers' check in a few thousand denominations. I pointed out what he can cand can not do.

Now for your question:

So, how about showing me the law where it is illegal to deposit $50k in your account.

How many stories and cases should I cite where the government confiscated funds without actually connecting them to any criminal activity? Do you know that when such claims are filed, they are not against the person but the money? If the government decides to forfeit this, the case will be "US vs $50,000 deposited in cash" not "US V. nickbn's wife"

There is a no law saying that it is illegal to deposit $50K in cash. But when you do that, the government WILL come asking about where that money came from and if they are not satisfied with the explanation, they will confiscate it. Is that right? Hell no. But that is the way we have allowed our government to behave in our collective names for decades and so that is what we are stuck with.

 

[20pilot]

good one**************

Gald to know the peanut gallery is enjoying the show!

 

[HomeGuru]

Gald to know the peanut gallery is enjoying the show!

**A: and you're the nut.

 

[justalayman]

=20pilot;2227232]The OP talked about a number of things including several cashers' check in a few thousand denominations. I pointed out what he can cand can not do.

Your post did a real good job of implying the OP was attempting to commit a crime but they specifically posted they did not want to break any laws. I posted with the idea that OP is a law abiding citizen that simply is tired of all the hassle this will very likely bring and they were simply suggesting ideas that came in to their head in trying to deal with it.

Now for your question:
How many stories and cases should I cite where the government confiscated funds without actually connecting them to any criminal activity?

4 (not stories though. actual cases so the facts can be reviewed.)

There is a no law saying that it is illegal to deposit $50K in cash. But when you do that, the government WILL come asking about where that money came from and if they are not satisfied with the explanation, they will confiscate it. Is that right? Hell no. But that is the way we have allowed our government to behave in our collective names for decades and so that is what we are stuck with.

They didn't bother me with a $20k cash purchase of a car. Not sure what the limit is that really gets their attention. Maybe I should go buy a more expensive car and see what happens.

Dang 20, I used to have a friend that not only cashed every paycheck he had (much like OP's friend) but he also received a substantial amount of money from oil from his property. He stashed it all in cash in his apartment and bought everything with cash, including his vehicles. He died never having been approached by anybody concerning this. I always wanted to rent his apartment after he died because I know he had hundreds of thousands of dollars in cash stashed somewhere in that apartment. Sad to say, I did not get the chance.

I am not arguing that what you post is not possible. I am arguing that by your statements, everybody should never have any cash lest they are going to lose it to the government. I have a bit more hope for and faith in our government than that.