In Merrily We Roll Along, placing the orchestra above the stage brings the source of the music into full view. FinCEN’s Real Estate Reporting Rule, which recently was vacated by a Florida federal court, had a goal of moving hidden participants in real estate transactions into view when property is acquired through an entity or trust in a transfer not financed with using a traditional mortgage. The orchestra in Merrily voluntarily placed itself in full view, but FinCEN didn’t make reporting optional – it forced parties with legitimate reasons for establishing limited liability companies and trusts to report their ownership. Since the Florida decision likely will be appealed, parties that use entities to require real estate in transactions not financed by traditional mortgages should be aware that privacy is not guaranteed in the future.
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