Effective, today, March 1, 2026, the beneficial owners of certain residential real estate transactions must be reported to FinCEN (the Reporting Rule).
This update reviews the core fundamentals of the Reporting Rule. FinCEN’s website contains guidance and FAQs which are being updated and should be consulted.
The Reporting Rule requires, subject to specific lists of exceptions and exemptions, that a defined "Reporting Person" who performs closing or settlement functions in connection with transfers of residential real property, must report certain information to FinCEN about the transfer, including identifying information about the beneficial owner of the transferor, transferee and the property itself.
The Reporting Rule’s purpose is to combat and deter money laundering through the residential real estate sector.
How to comply with the Final Rule?
Any “reportable transfers” that take place on or after March 1, 2026, MUST be reported. FinCEN has published the required Real Estate Report Form as well as Filing Instructions on its website.
A sample of the reporting form is available here. Visit the FinCEN website to access the reporting website and current form.
What is a “reportable transfer?”
A transfer is reportable only if all four conditions are met:
1. The real property is residential
2. The transfer is non-financed
3. The property is transferred to an entity or trust
4. An exception or exemption does not apply [1]
Importantly, there is no minimum purchase price threshold for the rule to apply.
What is “residential real property?”
Only “residential real property” is subject to the Reporting Rule.
Residential real property means any real property, whether improved or vacant, designed principally for occupancy by one to four families, including:
- Single-family houses, townhouses, condominiums, cooperatives, buildings (including mixed-use buildings)
- Unimproved land on which the buyer intends to build a structure designed principally for occupancy by one to four families
Note: The Reporting Rule does not include commercial properties. A similar reporting rule applying to commercial properties is expected to be proposed and released for comments next year.
What is “non-financed?”
Only “non-financed” property is subject to the Reporting Rule.
Non-financed means:
1. Transactions with no consideration, (for example, a gift)
2. Cash transactions; or
3. Transactions involving an extension of credit unless the credit is:
a. Extended by a covered financial institution that is subject to an anti-money laundering program and suspicious activity reporting, and
b. Secured by the transferred property
Which transfers are exempt from reporting?
1. Easements
2. Transfers resulting from the death of an individual, by will, trust, intestate, etc.
3. Transfers resulting from divorce, dissolution of a marriage or a civil union
4. Transfers to bankruptcy estate
5. Transfers supervised by a court
6. Transfers resulting from an estate planning tool e.g., a transfer from an individual to a trust in which the individual and/or spouse is the same as the settlor(s)/grantor(s)
7. Transfers to a qualified intermediary for a § 1031 like-kind exchange
8. Transfers with no Reporting Persons or professionals involved
Which transferees are excepted from the Reporting Rule?
1. Securities reporting issuer (as defined in 31 CFR 1010.380(c)(2)(i))
2. Governmental authority (as defined in 31 CFR 1010.380(c)(2)(ii))
3. Bank (as defined in 31 CFR 1010.380(c)(2)(iii))
4. Credit union (as defined in 31 CFR 1010.380(c)(2)(iv))
5. Depository institution holding company (as defined in 31 CFR 1010.380(c)(2)(v))
6. Money services business (as defined in 31 CFR 1010.380(c)(2)(vi))
7. Broker or dealer in securities (as defined in 31 CFR 1010.380(c)(2)(vii))
8. Securities exchange or clearing agency (as defined in 31 CFR 1010.380(c)(2)(viii))
9. Other Exchange Act registered entity (as defined in 31 CFR 1010.380©(2)(ix))
10. Insurance company (as defined in 31 CFR 1010.380(c)(2)(xii))
11. State-licensed insurance producer (as defined in 31 CFR 1010.380(c)(2)(xiii))
12. Commodity Exchange Act registered entity (as defined in 31 CFR 1010.380(c)(2)(xiv))
13. Public utility (as defined in 31 CFR 1010.380(c)(2)(xvi))
14. Financial market utility (as defined in 31 CFR 1010.380(c)(2)(xvii))
15. Registered investment company (as defined in 15 U.S.C. 80a-3(a))
16. Subsidiary of an excepted entity
Who must file the Real Estate Report?
Only one professional involved with the transaction must file the Real Estate Report for each reportable transaction.
The Reporting Rule provides the following cascade of responsibility to file the Real Estate Report:
1. Settlement agent
2. Preparer of settlement statement
3. Filer of deeds or other transferring instrument
4. Title insurance underwriters
5. Person (or company) distributing funds for the transfer
6. Person (or company) preparing status of title
7. Person (or company) preparing deeds
If a settlement agent is involved in the transaction, the settlement agent is the required Reporting Person. If no settlement agent is involved, then the required Reporting Person is the next professional listed above.
The rule does allow for real estate professionals to enter into a written agreement to designate the professional that will be responsible for filing the report.
What information must be disclosed in the Real Estate Report?
1. The “beneficial owner” of the buyer, which has the same meaning used in the Corporate Transparency Act and would therefore require identifying the human who either directly or indirectly exercises “substantial control” over the transferee entity or who owns or controls at least 25% of the transferee entity’s ownership interests
2. Information regarding individuals or entities representing the buyer
3. The legal identity of the seller, including the trustee and beneficiaries of a trust, which is a seller
4. The Reporting Person
5. The address of the subject property
6. The date of closing
7. Payments made, including the amount of payment and total consideration; method of payment; the accounts used; and payor, if not transferee entity or trust
8. Information about hard money or loans, including extension of credit by a person who is not a financial institution required to maintain anti-money laundering program and required to report suspicious transfers
When must the Real Estate Report be filed?
The later of:
1. 30 calendar days after date of closing
2. The final day of the month following the month in which the reportable transfer occurred
Discerning which transfers are subject to the Reporting Rule can be complicated. We suggest conferring with legal counsel if there is any doubt as to whether your transaction is reportable. To learn more about the Reporting Rule or related matters, call 801-536-6792 or send an email to JPok@parsonsbehle.com to contact Jazmynn Pok; or call 208.562.4900 or send an email to nhardesty@parsonsbehle.com to contact Nickie Hardesty.
[1] Quick Reference Guide Residential Real Estate Reporting, Financial Crimes Enforcement Network, QRG-Am I a Reporting Person (last accessed Feb. 16, 2026).
