[HN Gopher] FinCEN proposes new rule for residential real estate...
___________________________________________________________________
FinCEN proposes new rule for residential real estate held in trusts
or LLCs
Author : the88doctor
Score : 66 points
Date : 2024-02-08 16:57 UTC (6 hours ago)
(HTM) web link (www.fincen.gov)
(TXT) w3m dump (www.fincen.gov)
| mattmaroon wrote:
| I wonder if this is inspired at least in part by the Russian
| invasion of Ukraine. Their oligarchs are known to use this method
| quite a bit.
| instagib wrote:
| I tried to parse a little of this so, FinCEN wants to know who
| profits off of real estate if you are a 5% equity share holder or
| 10% if at a director level in an organization.
|
| Will FinCEN publish these records? It would defeat the purpose of
| putting a home in an llc for anonymity.
|
| Under the proposed rule, persons involved in real estate closings
| and settlements would continue to be exempt from the anti-money
| laundering compliance program requirements of the Bank Secrecy
| Act. I.e. loans, banks.
| mikeyouse wrote:
| The records aren't publicly available - they'll provide them to
| the Feds and to anyone who provides a valid court order;
|
| https://www.fincen.gov/news/news-releases/fact-sheet-
| benefic....
| gottorf wrote:
| > they'll provide them to the Feds
|
| That's too bad; methinks the Feds should also need a court
| order. Though, I suppose with FISA courts rubber-stamping
| warrants, it wouldn't even be a nuisance.
| mikeyouse wrote:
| Depends on your level of cynicism whether they'll follow
| the guardrails, but they do have some;
|
| > _Federal government agency access to BOI. Under the
| Access Rule and as authorized by the CTA, FinCEN may
| disclose BOI to Federal agencies engaged in national
| security, intelligence, or law enforcement activity if the
| requested BOI is for use in furtherance of such activity.
| "Law enforcement activity" includes both criminal and civil
| investigations and actions, such as actions to impose civil
| penalties, civil forfeiture actions, and civil enforcement
| through administrative proceedings. Prior to requesting
| BOI, Federal agency users will be required to certify that
| the agency is engaged in a national security, intelligence,
| or law enforcement activity and that the information
| requested is for use in furtherance of that activity. They
| will also be required to provide the specific reasons why
| the requested information is relevant to the activity._
| neilv wrote:
| > _It would defeat the purpose of putting a home in an llc for
| anonymity._
|
| That's a legitimate desire, and I think we should make privacy
| and the motives behind it available to everyone, not only those
| who can afford the expense and effort to set up and maintain an
| LLC.
|
| (I'd expect the solution to be a combination of changes: outlaw
| most data-brokering and trading of personal data, hold
| organizations responsible for the data they hold so much that
| they treat unnecessary personal data like an existential-threat
| toxic liability, change practices to make SWAT-ing not be such
| a risk even if some psycho did get hold of someone's address,
| hold demagogues responsible for using conspiracy theories they
| know are false to incite mentally ill people, and more.)
| phkahler wrote:
| >> It would defeat the purpose of putting a home in an llc
| for anonymity.
|
| > That's a legitimate desire, and I think we should make
| privacy and the motives behind it available to everyone, not
| only those who can afford the expense and effort to set up
| and maintain an LLC.
|
| I'm on the fence about that. Why should someone not be able
| to determine who owns a particular piece of property?
| egberts1 wrote:
| It is common for liberty-oriented officials to put their own home
| into an LLC and have an appointed officer/manager as the public-
| facing contact.
|
| I am quite sure that rich and powerful people will do some decent
| but firm pushback if FinCen goes too far in making records
| public.
|
| Edited: replaced 'privacy-oriented' with 'liberty-oriented' in
| light of Bruce Schneier's blog.
| wavefunction wrote:
| If they have nothing to hide they have nothing to fear. I would
| take the hypothetical fear and pushback by these "types" as a
| strong positive signal that this is an effort that is vitally
| worth doing for society.
| dogman144 wrote:
| They have to fear swatting. If you've got the time and
| knowledge of where the individual likely lives, a hunting app
| for instance will show who owns each land plot in clear-text
| lol.
| wavefunction wrote:
| Ok but I have to fear that, what's the purpose for
| different privileges? My info is publicly available.
| 1024core wrote:
| You want to find out where someone lives? Head over to
| zabasearch.com and search away!
| egberts1 wrote:
| Quoting Joseph Goebbels?
|
| Bruce Schneier said: "Too many wrongly characterize the
| debate as 'security versus privacy.' The real choice is
| liberty versus control."
|
| https://www.schneier.com/essays/archives/2006/05/the_eternal.
| ..
| wavefunction wrote:
| Liberty is freedom with responsibilty, not free from
| responsibility. There's definitely a middle ground between
| "You can only license one house from Great Society,
| comrade" and letting America become a rent-extraction
| exercise rather than real value creation. Forgive me for
| looking dimly on the situation.
| GoldenMonkey wrote:
| Is nothing in our life private now? What about the need for
| privacy. Random ppl shouldn't know your financial holdings.
| We have a real lack of privacy now and easy access to the
| public records.
| dwater wrote:
| There is public benefit to knowing the beneficial owner of
| real estate. It is the physical assets of a community and
| the community benefits from knowing who ultimately owns
| those assets.
| lazide wrote:
| Ultimately, this appears to be yet another step in the
| direction of deep control of society over wealth and the
| people who have it.
|
| Which, if you ever want to have anything of your own or
| be better than median in some way should concern you
| greatly.
|
| Some people will not rest until you're poorer and more
| miserable than them, no matter what. Even if it means
| hurting themselves (and everyone else) to do it.
|
| Crabs in a bucket mentality is deeply destructive and
| dangerous.
| kiba wrote:
| Land is a scarce and valuable commodity that should be
| divided amongst the community to maximize its benefit for
| everyone, typically through taxation.
|
| If you want the most valuable land, you should be
| operating enterprises that provide values high enough to
| pay for the land.
| Eisenstein wrote:
| Do you believe that wealth is an innate right no matter
| the societal cost -- that people should be able to own
| such things or amounts of things that it is to the
| detriment of those around them?
| Analemma_ wrote:
| Something like this argument applies to a lot of
| privately-created wealth, but not to land. Private
| ownership of land (and the profits generated by it) is
| completely philosophically incoherent if you spend a
| little time thinking about it, starting with the fact
| that private property rights require that stolen assets
| be returned and not able to be profited from, but all
| land is stolen when you trace back far enough, and all
| land ownership claims are the fruit of the poisoned tree.
|
| The best approach would be one where the government
| issues long-term leases to parcels of land, but property
| taxes are an okay-ish alternative if that (or LVTs)
| aren't feasible. Note that this is already what we do for
| things like the EM spectrum: the government owns it in
| the public trust, then leases it with an open bidding
| process.
| kiba wrote:
| If you tax land properly, it doesn't matter who's the
| owner of the estate as long as the state can reach them
| or start a process to claw back the estate for nonpayment
| of taxes.
| nostromo wrote:
| > If they have nothing to hide they have nothing to fear.
|
| Ok then. Share with us your email and social media passwords
| -- and give us access to your Google Photos while you're at
| it. Otherwise -- what are you hiding?
| wavefunction wrote:
| You're comparing a democratic government's lawful actions
| to your silly demands on the internet?
| davrosthedalek wrote:
| The expression "If they have nothing to hide they have
| nothing to fear" is one of the most scary sentences.
|
| I am sure the Dutch didn't think recording the religion/race
| was a problem. Until it was. Took some work to limit the
| damage [1]
|
| [1] https://en.wikipedia.org/wiki/1943_bombing_of_the_Amsterd
| am_...
| wavefunction wrote:
| Perhaps it was both tongue-in-cheek and not. But if they're
| not doing anything "wrong" then what is there to fear?
| Nothing.
|
| What will really happen is that we find out that there are
| millions of LLCs owned by a few corporate investment
| offices that are driving up the price of housing for my
| fellow citizens, actual human beings who I value far more
| than any legal fictions.
| davrosthedalek wrote:
| What have the Jews in the Netherlands done wrong?
|
| Anyway, just to paint maybe some more realistic threat
| models: Swatting. People suing rich people to get "go-
| away" money. Targeted robberies or abductions.
|
| Privacy is a right, also for rich people. For any
| information that is private, I can find a good reason for
| it to not be private.
| Eisenstein wrote:
| Do you really think that society is so just that only
| those people who do wrong need fear things?
| PopAlongKid wrote:
| First sentence in the article explains the actual purpose, it's
| not about liberty/privacy, it's about catching criminals.
|
| > to combat and deter money laundering in the U.S. residential
| real estate sector by increasing transparency.
| Fin_Code wrote:
| This is deeply needed, one of the big causes of housing inflation
| is using it to launder money. Higher housing costs are better
| because you can launder more. Its like when rich people can't
| have a money trail for some shady activity so they sell art to
| each other for a wild amount. This will require all owners to be
| named instead of a nameless llc. Should help curb the process.
| max_ wrote:
| Can't some lawyer just be used as a proxy for holding the real
| estate?
| singleshot_ wrote:
| This is what a trust is, more or less. Legal title,
| beneficial ownership, and control can all be vested in
| different entities.
| psychlops wrote:
| > one of the big causes of housing inflation is using it to
| launder money
|
| I'd love a link backing this bold assertion.
| wmf wrote:
| You'll find plenty or none depending on your desired level of
| detail. After reading about this topic for years I still
| don't understand how to use real estate for money laundering.
| bombcar wrote:
| In _very specific_ cases it can be used to avoid certain
| countries ' laws about exporting cash/value.
|
| But that's not going to be a major source of real estate
| transactional volume.
| phkahler wrote:
| >> https://news.ycombinator.com/item?id=39277767
|
| Except in parts of Canada. This just came across HN
| earlier this week:
|
| https://news.ycombinator.com/item?id=39277767
| bombcar wrote:
| That's just liar-loans, not money laundering.
| Fin_Code wrote:
| This is actually quite easy. Lookup how to purchase a home
| with cash (its easy). The house is then assigned to an
| owning entity to become part of a portfolio. Then after a
| given time based on risk you can sell to generate revenue.
| Then disburse to other entities that lead back to the
| person that dropped in the cash. The wash is completed.
| Where else could you drop large quantities of cash then
| translate that to clean money?
| Fin_Code wrote:
| This is actually quite easy. Lookup how to purchase a home
| with cash (its easy). The house is then assigned to an owning
| entity to become part of a portfolio. Then after a given time
| based on risk you can sell to generate revenue. Then disburse
| to other entities that lead back to the person that dropped
| in the cash. The wash is completed.
|
| Where else could you drop large quantities of cash then
| translate that to clean money?
| jgilias wrote:
| Housing inflation everywhere is mostly due to the stock of
| housing growing a lot slower (or not at all) compared to the
| growth of broad money supply.
|
| If there's more of the thing that you use to account for stuff,
| but stuff doesn't become more, the number in your units of
| account goes up.
|
| Edit: Apart from that, there's monetary premium put on real
| estate, as people effectively use it to short the currency by
| buying it with debt.
| Centigonal wrote:
| I think this is great for AML, and also for making the activities
| of institutional buyers of real estate a little clearer. I'm
| reminded of this article specifically:
| https://www.sfchronicle.com/projects/2022/veritas-san-franci...
| singleshot_ wrote:
| It's also great for sending a swat team to your house, which
| might have a bit more sudden of an impact than the change
| you're envisioning.
| tptacek wrote:
| What does this have to do with SWAT teams?
| singleshot_ wrote:
| If a person knows where another person lives, the first
| person can send a heavily armed SWAT detachment to the
| second person's home. This is one reason my home is held in
| trust, so it's a little more difficult for some idiot to
| try this.
|
| I imagine if this route was banned, it would be a lot
| easier to figure out where a person lives, which would
| generally result in decreased privacy, safety, and
| security.
| Centigonal wrote:
| The proposed FinCEN rule is specific to non-financed (i.e.
| all-cash) transfers to companies or trusts. That in itself
| rules out the vast majority of private individuals. I'm sure
| they could also add carve-outs for primary residences or
| otherwise reduce the impact of this rule on private
| individuals.
|
| That being said, I think the number of people who live in
| fear of being swatted in their homes is at least two orders
| of magnitude smaller than the number of people who rent a
| home owned by a mysterious and unaccountable corporate
| landlord.
| singleshot_ wrote:
| That's really nice to know. I'm not sure whether my
| situation would qualify under that rule, thought. I do
| appreciate you sharing that detail. Carve-out for a primary
| residence would be nice but in that circumstance, it still
| seems like someone over at the government knows where I
| live, which is suboptimal.
|
| That being left aside, I am concerned about home intrusions
| much more than I am with economic equity for all _and_ I
| don't think this measure will be a particularly effective
| control on the latter.
| 1024core wrote:
| How do these trusts, LLCs, etc. work for inheritance? Can I
| bypass inheritance issues by, say, putting my house in a trust
| and making my kid one of the "owners" of the trust? Then when I
| pass away, s/he gets control of the trust and thus own the house?
| toomuchtodo wrote:
| There is nuance, but yes. It doesn't avoid taxes except in
| certain edge cases; it is a more efficient form of probate. The
| target of the assets is the "beneficiary."
|
| https://smartasset.com/estate-planning/how-to-avoid-estate-t...
|
| https://www.nerdwallet.com/article/investing/estate-planning...
| whitej125 wrote:
| More specifically... "probate issues".
|
| If you die with assets... you assets are going to be
| transferred to beneficiaries in accordance with a will if you
| have one. It's a lengthy legal process called probate. Because
| its going through the court system the filings are all public
| record too.
|
| If you put your assets into a trust (generally a revocable or
| living trust)... when you die you aren't dying with any assets.
| The trust "lives on" and has the rules for distribution
| codified into it. No probate court. No public record of assets,
| etc. Tends to be a faster, more efficient for everyone process
| as I understand it.
| dikaio wrote:
| We have a business in Las Vegas incorporated as an LLC and
| incorporated in Wyoming to hold real estate that we purchase
| overtime and leave to our kids and just yesterday we were
| notified that FinCen is requesting names, contact information,
| IDs (passport, drivers license) and percentage owned in the
| corporation. I would have thought they would have had all that
| information prior from our filings. In my eyes there's nothing
| wrong with any of this, it's all standard procedure but my
| assumption is that it's all rooted from an underlying issue, the
| US balance sheet keeps going up and the government is looking to
| cross all Ts and dot all I's on where they can collect. The
| underlying issue never gets fixed, that's that the government
| can't stop spending. Fix government, fixes the issue.
| ragnot wrote:
| So to clarify, you have an LLC in vegas owned by a holding LLC
| in Wyoming? Is that only for anonymity?
| cyanydeez wrote:
| good.
|
| wealth transfer is obscene.
___________________________________________________________________
(page generated 2024-02-08 23:02 UTC)