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kerica2876 | Is it true that you can only deposit/withdrawl under $10,000 without raising eyebrows? |
I am getting ready to close my first mortgage and my grandmother is giving me the cash to close as a gift. It's $12,000. I've been told that she will have to write me two seperate checks for it to deposit into my account otherwise we could both get penalized or something. Anyone know anything about this?
We are in Ohio, btw. |
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Andrea
 |
No, that is not true.
It is true that if you deposit over $10,000 actual cash, the teller will have to fill out a form. It is to help catch money launderers. You have no reason to worry about this reporting if your grandmother actually handed you $12,000 in cash.
Therefore, there is no need for 2 separate checks as checks are exempt from this reporting requirement. A check leaves a paper trail. End of story.
The one thing you might want to do is check with your mortgage company. They may want your grandmother to sign something to say that the money is gift and not a loan.
Good luck in your new house!
Edit to add:
After I posted my reply, I saw all the responses with suggestions of structuring your deposit. Structuring means making multiple deposits below the limit and other activities to avoid reporting. Don't pay any attention to those people. You aren't doing anything wrong and have nothing to worry about.
To the people who think that the banks won't catch you when you structure deposits, you should think again. The banks aren't stupid. There are things in place to detect structuring. If you're doing anything illegal, better not take your cash to the bank. |
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beancounter
 |
Andrea is giving you good advice above.
Cash transactions over 10K are supposed to be reported to the IRS. Even with a cash transaction that large there's nothing to worry about if you're not doing anything illegal. The purpose of the regulation is to find people trying to launder money from illegal activities - that's certainly not the case when a grandmother wants to help her granddaughter buy a house. |
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shoredude2
 |
Actually two checks will set off more alarms than one check. You have to file a form for any deposit or withdrawl over $10,000 showing where the money came from. When you show that it was a gift from your grandmother, the IRS won't even give it a second look.
Now when you deposit two large checks, they will investigate for trying to circumvent the rules. |
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terribrooke
|
Just have your grandmother write one check. In the memo line, write "House closing cost gift." Your bank is probably going to place a hold on this check, so don't plan on being able to spend it for at least 7 business days, maybe even 11.
If the transaction is in cash, it's better to just make the full deposit at the same time and get it over with. The bank will fill out a Currency Transaction Report and send it to the IRS. If you try to get out of this by breaking your deposits up into smaller amounts, or on different days, or even at different bank branches, this is going to trigger the bank's system and a Suspicious Activity Report will be filed. This is also called structuring and is illegal. |
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Franco
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Not true. Only you may be asked to give an explanation, to help in controlling money laundering, drug dealing and similar skulduggery.. |
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brookefootball32
 |
Tellers at our bank wouldnt question your deposit as long as it isn't cash, but they could put a hold on the check for up to 10 days since it is over 10k. |
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Steve D
 |
There is no penalty for the transaction. You may just be required to fill out a form because the transaction is over $10,000. And according to the summary on Wikipedia, cutting two checks won't help, since the banks are supposed to go by daily aggregates (see the Wiki link)
On a side note, just make sure to get a gift letter from your grandmother stating the $12,000 is a gift and not a loan. That will make the mortgage processing go a lot easier. |
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Insurance Pickle.com
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if she's writing you a check it doesn't matter since a check is traceable. If she's handing you cash it does. |
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Worldly25
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Normally any transaction 10k or more the banks alert the IRS,
But banks have the leeway to file forms on any deposit they feel is unusual. Just deposit the 12k check and let the teller know you are buying a house. That explains the deposit. |
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$NATE$
|
you will not be penalized or anything. But if you deposit it into your checking, or savings account, it could be investigated. Banks are required to report any deposit over $10000 to the government, so two seperate deposits would eliminate the risk of being audited. Im not sure what happens if they decide to investigate, but it could delay your closing. So I wuld suggest going with two deposits so you dont have to worry about it. If you are dealing in cash, it won't matter, there is no way to trace a cash transaction so you dont have anything to worry about. Except maybe getting mugged. Hope this helps.
Yes, If you are doing two depsoits, dont do them at the same time, go on two different days. |
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sunvegas
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After 9/11 the gov passed a new law that says if anyone wants open an account must show I.D and i think social security #.I don't think you are going to have any problem b/c you'r not taking out the $12,000 you'r going to deposit it.If I were you I would take my grandmother and go to your bank togather where you have an account and take care of it at once and move on. |
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RIM
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Yes. Try something other than $9,999 |
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