I was wondering if I were to buy a house and put down $100K in cash that wasn't in any of my bank accounts, would that look suspicious?

Or, how about if i were to pay off a $30K car loan in 5 months, when I don't even come close to making 30K in 5 months at my current job. Does that kind of thing raise flags somewhere? This is just hypothetical, but I was just wondering.

In general large cash payments have to be reported to somebody (irs? fbi?). I beleive this happens when you ask for or show up with large amounts of Cold Hard Cash at a bank.

Matthew

Have you ever bought a house before? There's so many people involved with the transaction, and the forms are so detailed, and every little thing is checked to the Nth degree, that everyone gets to see every detail of your personal finances.

You can't pay for that sort of thing with currency bills, the people involved in those kinds of transactions don't handle cash. And to get a cashier's check, you gotta go to bank, and banks are required by law to fill out a large currency report on anything over a certain amount (which is surprisingly low).

Sorry, there's no way around it. You gotta launder that drug money properly.

How about if I've been walking into my bank and making $1000 cash car payments every week for the last two months? That isn't too bad, is it?

What i want to know is where you found the treasure chest!

No, that shouldn't trigger anything. I dunno the exact numbers, but it's like anything $5000 or over (within a certain time period, like a week or something) gets reported. That's why I have to declare all the paypal income from Docks and file it and expenses against my (own) corporation.. Bad enough getting searched at airports every time, don't want them showing up with with warrants for the house too!

Cheers

One of my good friends' father is a real estate lawyer and she worked in his office during high school. One day he buzzes her from inside a closing meeting, asking her to bring coffee. She didn't usually bring coffee into these meetings, so she was a little confused. Anyway, 5 minutes later she opens the door to bring the coffee in and sees a bit over $350,000, in cash, sitting on the table in nice little piles. Her dad smiles at her and thanks her for the coffee and she leaves.

It does happen!

-Zeke

ps: As for the on-topic question: I have no idea whatsoever.

I'm going to have to ask my dad about that one. It seems a bit fishy to me. He manages a trade association that deals in everything related to title (house purchasing being a large part of that). It certainly is nice to be in the room with those lawyers and be able to say "you see that form you're using? I make that form"

You've got a couple of things going on there. There's the post-fact audit stuff, like "what if I pay off a car loan..". No, the act of paying the car loan early probably won't trigger anything by itself, but should you ever trigger any kind of tax audit from other behaviour (like, paying in $10,000 a week in cash bills), then that's exactly the sort of thing the auditors look for. ("Ah Mr Smith, nice Lamborghini. How did you pay for that ?" "oh, it was one of those ebay auctions that closes at a strange time and no-one else bid").

The second thing is the cash handling. On top of the regulatory limits (usually a $10,000 cash movement) which automatically trigger a report from the bank, there is also now much more "know your client" legislation in place following Sep 11 (eg Patriot Act). This requires an institution to file a report should you do anything which might seem a little odd, irrespective of any regulatory limits. Rolling up one sunny morning with a bag full of freshly printed bills might qualify as "a little odd".

Regards

Mark

This hypothetical is dying to have some sort of backstory ...

You're right about any bank transaction over $10,000 having to be reported to the government (and if the money is legally yours, all is fine). But I know that people have been investigated for making repeated cash deposits "just under" $10,000.

The thing is, selling a car or something might give you a one time chunk of change, but doing it repeatedly looks odd.

When I bought my house, they checked every deposit I made and wanted pay stubs to show for it.

My money is on inheritance. Sorry, pun intended. - trs

It has been my experience that most lenders want see that the cash has been in your account for a given period of time (i.e. >30 days). I've run into this several times in that I won't buy a house w/o 20% down to avoid otherwise included the taxes and insurance.

The reason this comes up is because they don't want to risk loaning you a pile of dough based on what appears to be your strong financial position (or ability to pay) only to find that you "borrowed" the money from a rich in-law to qualify. Worse yet you may have taken a huge cash advance or other loan to cover the closing/down and now they are at risk of loosing more.

Buying a house basicially invites many people into your personal life for a few months. I lost count of the amount of bank statements I had to fax somewhere, all with notes explaining several deposits. Mind you, the notes wern't enough, it was to point the person to the other paperwork included, like proof that one $1500 deposit was actually my tax refund, then a series of deposits totaling $9000 was my stock selloff.

It was definitly a big mess, but worth it in the end. I am sure 100k down that was not showing up anywhere in your history would raise quite a few flags, potentially enough to deny a loan for the rest of the house.

Buying a house basicially invites many people into your personal life for a few months.

Likewise refinancing, but to a lesser extent. I sign the papers Friday.

funny I just got a new home loan.... they didn't need to see my bank account papers just a few paystubs and 2 years worth of w2's.... got a 30 year fixed at 6.25% with 5% down... pretty decent I thought...

they can get suspicious all they want, but they can't do shit without proof that you haven't paid taxes on it.

They (well, banks, anyway) can deny you a loan in a heartbeat, as others have pointed out. Of course, that may not be what the OP is concerned about....

I upgraded from a 30yr fixed (8.25%) to a 15yr fixed (5.125%), and cashed out, same mortgage company (ABN AMRO). Had I not cashed anything out it would have been simpler. I put 30% down on the house when I bought it, and this cash-out actually takes me a few thousand dollars back above what I originally financed for. But for $45 more per month I can pay off some debt and knock 7 years off the loan (the closing is 5 days before the 8th anniversary date of when I first bought).

I'm hoping to buy a ground source heat pump and solar panels, but we'll see how that goes after this fun is done.

Thats awesome, I tried for a 15 year, unfortunately the payments would have been too high, they said I didn't qualify for that... it kills me because the payments would have only been a couple of hundred more a month. What sickens me is after 30 years I'm actually paying 700k for a 300k home...

I often dream of stumbling across a drug dealer's stashed thousands. I'd have no problems lifting it! Of course, I'd be paranoid for the rest of my life, waiting for the 'hit'.

Brett,
There's nothing stopping you from making that extra couple of hundred dollars a month payment towards your principal amount. This will dramatically shorten the loan period and save you thousands. Besides, if you do hit a dry spell and have to miss a mortgage payment or two, the bank is happy to let things slide, so long as you're net ahead of scheduled payments. They want you to take the full loan time to pay it off, they make more money that way. I know Quicken has 'what-if' type loan analysis tools that you can use to figure out net savings for any amount extra you'd contribute.

-Zeke

I have a ground source heat pump (was in the house when I bought it) .. It's pretty damn nice and does an amazing job during the summer (not as much in winter). Sadly Solar just wasn't cost effective when i did some research recently. I did a lot of looking and just couldn't justify the expense -- it would take like 20-25 years to pay itself off.

The questions are:
a) is my lot big enough for the holes (they'll have to be vertical, it's not big enough for loops)
b) can they get the drilling rig in
c) is too much work required inside

As to solar, I expect >$10k for an installed system, my current electric bill is $65/mo, and nobody at this end of PA is offering rebates, but I may do it anyway.

Mock me, I live in a 50k (and change) house. Nothing on the street is over 100k, though with the work we did after we got it this is probably worth at least 10k more than when we got it. Good enough.

does your power company allow you to sell power back to the grid?

I live in a 50k (and change) house

Around here I believe that would buy me an outhouse.

lol. true.
my family just moved to delaware. they were able to sell their house in montana for 110k. put approximately 25k into it. large two story 100 year old house. similar houses where they are looking (wilmington... i think? something like that) are running about triple what they sold it for.

No reason to mock.... I wish I only had to pay 50k for a house, I could buy the same house I just financed for 339,000 in KY for 100k or less. They aren't kidding when they say location, location, location it was that or spend 50k less and have to commute 3 hours a day. My friend owns a 900 square ft shack, but because he live inside the 495 beltway he can sell it for 375k. Its extremely silly.... On a positive note... the townhouse I bought 3 years ago for 140 sold in 4 days for 235...

IIRC their tariff lets me bank in the grid, but not get paid. E.g. I can put power in during the day and take it out at night, but if I give them a net excess I lose it.

I can live with that. I can also sell my renewable energy credits.

I live 20 miles from the center of Pittsburgh, and work a few miles closer to my house than that. But, real estate closer to where I work (other than right on top of it) isn't really outrageous either. It was an accident of timing that I ended up living where I do.

Can I just say that it's money I won from gambling at a casino? Are they gonna try to tax all of it?

if youre worried about taxing, i believe one is allowed to 'gift' someone a certain sum tax free. the cap may vary by state.

yes, taxing is one concern, but the main concern is if they're going to be like, "how the hell do you have this much money and where did it come from?"

assuming its legit money, whats the problem with the questions?
this whole thread seems kinda shady, not that i disapprove.

If you had a very large amount of cash spare, you could build a new house and pay the builders in cash installments (like having them on the payroll). You'd get it cheaper too.

For the record, gambling has a $3000 limit before they tax you right there at the table/machine. Been there, done that. For the record, gambling losses are tax deductable, up to the value of your winnings. In other words, if you win 10k, and lose 5k, you can claim the 5k n losses and only be taxed on 5k at the end of the year. This is one of the reasons casino's give you incentives to sighn up for their players club cards. They get your SSN.

$10k is the number I keep hearing where transaction reporting is required. I know that when I paid for my last car the Credit Union officer wanted to know what the debit was for.

BTW, One of the local car dealers spent time in lockup for his part in selling a car for cash and hiding the sale in a series of under the limit cash payments. If I remember correctly the buyer was a suspected drug dealer.

I can't see the IRS getting excited about you spending tax paid money. Inheritences happen all the time. But dropping big bunches of money without much to show for it... It's hard to say if any attention is going to be noticable.

Can't you just say it's your life savings that you kept under your mattress your whole life? If you're old enough, there is no way they could possibly track that.

You'd have to make sure they were all old bills, a feat that would NOT be easy as the life span of a bill is 5-7 years.

Anyone know if you can still transfer cash to swiss bank accounts? That might work. Or you can always report it as illegal income on your tax form.. wonder what happens if you do that.

Anyone know if you can still transfer cash to swiss bank accounts? That might work.

No problem with the swiss, but the problem would be to get the money out of your home country.

Or you can always report it as illegal income on your tax form.. wonder what happens if you do that.

Well, there was a bit of debate about that over here in Holland. These days most prostitutes do declare their income and pay tax. But there was an issue about the "professional expenses" they were allowed to deduct...

what kinda drugs are you selling?lol.if you have any good friends you can have them buy and get the loans in there name then give them the the cash to make the payments.for car, or other toys.