The Condado Group LLC

FinCEN Reissues Real Estate Geographic Targeting Orders for 12 Metropolitan Areas

May 08, 2020

WASHINGTON—The Financial Crimes Enforcement Network (FinCEN) today announced the renewal of its Geographic Targeting Orders (GTOs) that require U.S. title insurance companies to identify the natural persons behind shell companies used in all-cash purchases of residential real estate.  These renewed GTOs are identical to the November 2019 GTOs.  The purchase amount threshold remains $300,000 for each covered metropolitan area.

The terms of this Order are effective beginning May 10, 2020 and ending on November 5, 2020.  GTOs continue to provide valuable data on the purchase of residential real estate by persons possibly involved in various illicit enterprises.  Reissuing the GTOs will further assist in tracking illicit funds and other criminal or illicit activity, as well as inform FinCEN’s future regulatory efforts in this sector.

Today’s GTOs cover certain counties within the following major U.S. metropolitan areas:  Boston; Chicago; Dallas-Fort Worth; Honolulu; Las Vegas; Los Angeles; Miami; New York City; San Antonio; San Diego; San Francisco; and Seattle.  FinCEN appreciates the continued assistance and cooperation of the title insurance companies and the American Land Title Association in protecting the real estate markets from abuse by illicit actors.


New Reporting Rules for Foreign-Owned LLCs Effective January 2017

The IRS finalized regulations in December of 2016 that require all foreign owners of single member LLCs to file an annual information return with the IRS. A single member LLC is an LLC owned by one person or entity, or by a husband and wife. Until now, the ownership of the LLC itself did not have to report.

Many foreigners have created a U.S. LLC themselves online or through an inexperienced advisor and will not know about this new reporting requirement. Failure to file this annual return results in penalties for foreign investors using LLCs to hold investments or conduct business in the United States or abroad. If a foreign person fails to file Form 5472 when required, the initial penalty is US$10,000. This penalty is increased by US$10,000 for each 30-day period (after an initial 90-day period) for which the failure persists.

What are the choices for a foreigner now?
  • Find out if you or your business entity is classified as a foreign owner. Immigration or securities law status are not the same as the tax definition;
  • Do nothing and get penalized – you will get caught – be warned; or
  • Report on Form 5472 your ownership of the LLC – get a tax ID from the IRS and pay taxes; or
  • Do some planning ASAP – so that the LLC is reported but with a tax efficient structure.

The Condado Group LLC has solutions for the foreign owner of a U.S. LLC. Do Not Wait.

  • If the choice is to file form 5472 and get a tax id from the IRS, Condado can help.
  • If the choice is to first find out what the tax planning options are available, Condado Group encourages all foreign clients with single member LLCs to get an advisory tax planning letter.

Contact Mary Vigal


Tax Advice and Solutions

For foreigners coming to the United States to visit, live, work or invest.

For foreigners with FIRPTA planning and tax savings.

For US taxpayers – planning for income tax and estate/gift tax savings.

How to safely maximize your opportunities with established strategies.

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Tax Guide 4 Foreigners: Investing, Working or Living in the United States published in English, or in Bi-lingual English-Simplified Chinese in print or in English in ebook formats from Amazon.com

Also available to purchase in a Bi-lingual English-Simplified Chinese version at www.taxguide4foreigners.com. This edition is for those purchasers outside of the Amazon shipping areas. It requires that you print out the copy purchased yourself.