10K is the IRS mandatory, the rules go farther to report anything suspicious most banks have software that will automatically generate a report. The most common is fools depositing less than 10K while attempting to stay under the threshold the fact of the matter is $1000 is enough to cause a report on some accounts.

No and yes.

No: It's not an income tax item (for either you or the buyer.)

Yes, there is a gift of the difference between the FMV and what he pays you. This would likely require you to flle a gift tax return (Form 709).
Assume the lot is worth 50. You sell it to him for 30. You have made him a gift of 20. The annual exclusion for gifts is 13 (13,000 actually) Your net gift is 7. You have a 1 million dollar lifetime gift tax "exclusion." No tax currently due and your remaining lifetime exclusion is 993,000. Rules are better if you make a joint gift with your spouse.

I don't know about buying but I have sold three of my own houses over the years without the alleged "benefit" of a real estate agent involvement. All I did was hire an attorney at a very reasonable cost to do the paperwork and make sure the transaction went legally. I was able to sell the houses at a much lower price since there was no commission to pay and split the saving with the buyer. Everyone made out except the blood-sucking real estate agents.

I would imagine a buy could be done the same way

Bingo!


http://www.irs.gov/businesses/small/article/0,,id=148821,00.html

FAQs regarding Reporting Cash Payments of Over $10,000 (Form 8300)

What does “cash” mean for the purposes of Form 8300?

Cash is money. It is currency and coins of the United States and any other country. Cash is also certain monetary instruments - a cashier’s check, bank draft, traveler’s check, or money order - if it has a face amount of $10,000 or less and the business receives it in:
A “designated reporting transaction” as defined in Treas. Reg. section 1.6050I-1(c)(iii) (generally, a retail sale of a consumer durable, a collectible, a travel or entertainment activity) or
Any transaction in which the recipient knows the payer is trying to avoid the reporting of the transaction on Form 8300.

Is a personal check considered cash for reporting on Form 8300?
Personal checks are not considered cash.

What is the definition of a transaction?
A transaction is the underlying event resulting in the transfer of cash. Examples include:
Sale of goods, services or real or intangible property
Rental of goods or real or personal property
Cash exchanged for other cash
Establishment, maintenance of or contribution to a trust or escrow account
A loan repayment
Conversion of cash to a negotiable instrument such as a check or a bond

What is a designated reporting transaction?

Generally, a designated reporting transaction is the retail sale of any of the following:
A consumer durable, such as an automobile or boat. Property is generally a consumer durable if it is tangible personal property (not real or intangible property) that:Is generally suited for personal use,
Is expected to last at least one year under ordinary use, and
Has a sale price of more than $10,000.
A collectible (such as a work of art, rug, antique, metal, gem, stamp, or coin)
An item of travel and entertainment (if the total sales price of all items for the same trip or entertainment event is more than $10,000).

What you are talking about is the IRS rule there are banking sub rules that are much more stringent than the $10,000 rule. If a person deposits $4000 cash into an account that has not had that kind of deposits it will trip a report, if they bring cash in to pay off a loan, it will trigger a report. If you try to trickle money in an account to stay under the radar it will trigger a report.

I took the exam last week and am proud to say I scored 100% on that PIA

If it doesn't go to the bank it triggers no report.

__________________
1999 SL500
1969 280SE
2023 Ram 1500
2007 Tiara 3200

Why would someone deposit cash? As posted by everyone, that just sets off alarms.

You beat me to it, Hat.

Yep, plus a lot of cash can be converted into forms that are far more easy to hold and hide. Say gold or silver coins, or diamonds.

Or you can trickle it slowly over time into things like property...

__________________
1999 SL500
1969 280SE
2023 Ram 1500
2007 Tiara 3200

I could quote Brian's famous saying, but it's not really necessary is it?

To pay off loans or use the cash as reserves or make payments on a legitimate transactions.


Lots of reasons.

That's such a common and uncreative reason.

Thanks for the insight on this.

For personal reasons I'm looking to reduce my financial "footprint" - my worth on record with various institutions. I'm looking at pretty much any legal way to do this - cashing out properties, investments, etc... I also don't want this process percieved as income and have to take a big tax hit on it.

Who should I see about this process? An attorney, financial planner?

Like I said, this has to be legal - I don't want to break the law but I might consider an end run around it...

__________________
-Evan


Benz Fleet:
1968 UNIMOG 404.114
1998 E300
2008 E63


Non-Benz Fleet:
1992 Aerostar
1993 MR2
2000 F250

Do you think the metal sellers are exempt from reporting requirements? Do you think they are not audited by the IRS, DEA and police.

You guys honestly sound like a bunch of jailhouse lawyers, I know of a couple ways to get around some cash requirements but it has to be planned,thought out and deliberate which = serious jail time.

Meanwhile, at the Swiss Bank trial in Miami today....

U.S. investigating more than 150 UBS clients for possible tax evasion
Posted 1h 38m ago By Kevin McCoy, USA TODAY

More than 150 wealthy American customers of Swiss banking giant UBS are under investigation for suspected tax evasion, federal prosecutors disclosed
Tuesday.
The glimpse at the scope of the much-watched criminal probe of Americans who may be hiding offshore assets from the IRS came in a Florida federal court filing as UBS prepares to give federal authorities the names of more U.S. clients who will likely face similar tax investigations.

That handover, expected as early as Wednesday, is expected to "produce the identities and account information of additional UBS customers who are believed to have violated United States law," Acting U.S. Attorney Jeffrey Sloman said in the court filing.

Tax lawyers for UBS clients said they expect the bank will provide data for thousands of its American account holders — but not for all of the estimated 52,000 U.S. customers the IRS demanded in a federal court lawsuit. The handover stems from a settlement reached in the case last week by UBS and the Justice Department.

The 150 Americans now targeted by prosecutors are among roughly 250 U.S. clients of UBS whose account information the bank gave to the Justice Department earlier this year because their accounts bore potential signs of tax evasion.

Along with providing the financial data, UBS agreed to pay $780 million to defer prosecution of criminal charges that it routinely sent its bankers on secret trips to the U.S. to help American customers hide assets offshore.

So far, three of the clients whose accounts were included in the initial UBS handover have pleaded guilty to filing tax returns that falsely failed to report millions of dollars in assets or income. A fourth is scheduled to plead guilty next month to charges of failing to report a UBS account allegedly used to evade taxes on more than $1 million in business income.

In all four cases, the UBS clients disguised their ownership of the secret accounts by controlling them through entities in Hong Kong, Panama or the British Virgin Islands, federal court records show.

Tuesday's federal court filing came in the case of Bradley Birkenfeld, a former UBS banker who pleaded guilty last year to charges he conspired to help some of the bank's American clients evade taxes.

He faces a maximum five-year federal prison term at a scheduled Friday sentencing in Fort Lauderdale. But federal prosecutors, citing Birkenfeld's "substantial assistance" to tax investigators in the U.S. and other countries probing suspects in UBS-related cases, recommended that he serve no more than 30 months.
(chirp, chirp, chirp)

As someone in the building trades, I'd say you couldn't find a better way to lose a friend and several thousand dollars at once.

__________________
1984 300TD