Reporting Rule Might Deflect Some Criticism of U.S. as Tax Haven
A recent requirement to report the underlying buys of real estate in New York and Miami may deflect some criticism of the U.S. as a tax haven. Taxation attorney Kevin Packman says the temporary reporting requirement is not foolproof because it focuses only on cash transactions.
"If the purchaser has a mortgage, then the rules do not apply," he said. "I suspect the belief is that, if there is a mortgage in place, the lender's due diligence [requirement] kicks in and they can determine if the funds are from legitimate means. Notwithstanding,... if this works, I do believe we can expect FinCEN to kick in greater rules in other areas."