UPDATE APRIL 2026: THIS REPORTING RULE HAS BEEN SUSPENDED PENDING FURTHER NOTICE  - MUCH LIKE THE BOI REPORTING LAST  YEAR  - LET"S SEE WHAT HAPPENS!

Most well designed asset protection plans for real estate investors (which includes flippers, rental property owners, hard money lenders, developers, etc.) and owners, use entities like trusts and LLCs to hold real property to both protect the property from the external liability of the owner and to protect the owner from the internal liability of the property.

On the tail on the Corporate Transparency Act that required the reporting of the beneficial ownership and control of various corporate entities like LLCs, FInCEN has imposed new reporting requirements for transfers of real property that do not involve traditional bank financing. My Colleague, Attorney Valeria Garcia with Lodmell and Lodmell, (where I am also of-counsel and a lead attorney for the Asset Protection council) put together a really good summary of the issues (so far) that I share here with her permission. This will be of interest to both investors as well hard money and "private mortgage" lenders and realtors, who will all be affected and subject to reporting rules. 

Ike Devji

New FinCEN Real-Estate Transfer Reporting Rules for Entity-Owned Homes Include Asset-Protection Structures

By Valerie Garcia

Beginning March 1, 2026, the U.S. government will implement sweeping new reporting requirements affecting certain residential real-estate transactions involving LLCs, trusts, partnerships, and similar entities.

The rules were issued by the Financial Crimes Enforcement Network (“FinCEN”) as part of a broader effort to increase transparency in real-estate ownership and deter money laundering through non-financed property purchases.

For many of our clients—who hold real estate through LLCs owned by limited partnerships or trusts as part of a layered asset-protection strategy—these new requirements are highly relevant.

This article explains:

• what the new rule covers,
• how EINs and ownership information come into play, and
• how common asset-protection structures may be affected.

What Is the New FinCEN Real-Estate Rule?

FinCEN's “Residential Real Estate Reporting Rule” requires certain real-estate closings to be reported through a new electronic filing known as a Real Estate Report.

The obligation applies to transfers of:

• residential real property (such as homes, condos, townhomes, co-ops, and qualifying residential vacant land),
• that are not financed through a traditional institutional mortgage, and
• where the buyer (transferee) is a legal entity or trust, rather than an individual.

If all three elements are present, a report must be filed with FinCEN after closing.

Who Files the Report?

FinCEN places reporting responsibility on professionals involved in the transaction—often:

• the title company,
• escrow or settlement agent,
• or the attorney preparing or recording the deed.

These parties can agree in writing which of them will submit the report, but the obligation generally does not fall directly on the buyer.

That said, entity buyers should expect to be asked for detailed information in advance of closing so the reporting party can comply.

Where EINs Fit In

A central feature of the rule is identifying the entity that is taking title.

When the transferee is an LLC, partnership, or corporation, the report must include:

• the entity's legal name,
• address,
• jurisdiction of formation, and
• taxpayer identification number—typically its EIN.

Even if an LLC is disregarded for income-tax purposes, it is still treated as a distinct entity for these reporting purposes and therefore must be identified with its EIN issued by the Internal Revenue Service.

Beneficial Owners Are Separate

In addition to the entity's EIN, FinCEN requires information about the individuals who own or control the entity—generally those who:

• own at least 25% of it, or
• exercise substantial control.

Those individuals are reported using personal identifiers (such as Social Security numbers or ITINs), not the entity's EIN.

In practice, this means:

Two layers of identification are required:
the entity's EIN and the individuals behind it.

Does This Apply If Someone Transfers a Home Into Their Own LLC?

Yes—it can.

If an individual deeds a residence from themselves personally into a wholly-owned LLC, the LLC is still a separate legal transferee. If the transfer is not accompanied by institutional mortgage financing, and the property is residential, it may fall squarely within the reporting rule.

The fact that the same person is on both sides of the transaction does not remove it from FinCEN's scope.

How This Affects Common Asset-Protection Structures

Many of our clients use layered ownership structures such as:

• a residence owned by a single-member LLC,
• that LLC owned by a family limited partnership,
• whose limited partner is a trust,
• with a management LLC as general partner.

These structures remain entirely lawful and effective for asset-protection purposes—but new reporting considerations arise whenever residential property is transferred into or among those entities.

Examples That May Trigger Reporting

After March 1, 2026, FinCEN analysis will likely be required when:

• a client deeds a home into a newly-formed LLC,
• an LLC transfers residential property up into a partnership,
• a trust-owned entity acquires a residence without a bank loan,
• real estate is re-titled during restructuring or refinancing (depending on financing involved).

Each step involving a residential property + entity transferee + no institutional lender must be evaluated carefully.

What Information Will Be Requested at Closing?

Clients using entities should expect new questionnaires requesting:

• EINs for each entity in the ownership chain,
• formation documents,
• ownership percentages,
• names and identifying details of controlling individuals,
• trust information where applicable.

Providing this information promptly will help avoid closing delays.

What the Rule Does Not Do

It is important to emphasize:

• The rule does not prohibit entity-owned real estate.
• It does not invalidate asset-protection planning.
• It does not create a new tax.

Instead, it creates a federal reporting obligation aimed at transparency in certain transactions.

Planning Ahead: What Clients Should Do Now

Clients who regularly hold real estate through LLC/LP/trust structures should consider:

1. Confirming EIN records for all entities.
2. Keeping ownership charts updated.
3. Coordinating early with title companies before transfers.
4. Looping legal counsel in before re-titling property among entities.
5. Reviewing whether upcoming restructurings might occur after the March 2026 effective date.

Early planning can prevent surprises—and keep transactions moving smoothly.

FinCEN's new real-estate reporting framework represents one of the most significant federal changes to entity-based property ownership in decades.

For clients who use LLC-and-LP structures as part of a comprehensive asset-protection strategy, the takeaway is not alarm—but awareness.

Transfers that once required little more than a deed and title policy will soon involve federal reporting, EIN disclosures, and beneficial-ownership certifications.

Handled properly, these requirements integrate cleanly into existing planning. The key is knowing they are coming—and structuring transactions accordingly.

The rule applies to transactions occurring on or after March 1, 2026.

It does not apply retroactively to property you already own — unless you transfer it after that date.

As always, we will keep you updated should there be any changes to the legality of this rule or any deadline changes.