Implications of a Recent Law on Real Estate Investors: Strategies for Compliance and Risk Mitigation

An obscure new law has taken effect and no one seems to be talking about it, yet if you own real estate through an LLC or other legal entity it already applies to you.

But, what exactly is the Corporate Transparency Act (CTA), and how will real estate investors be affected? We’ll explore these new requirements.

What Is the Corporate Transparency Act (CTA)? In 2021, Congress enacted the CTA to combat illegal activities like money laundering and terrorist financing. One stated aim of this law is to stop “criminal actors” from using entities to purchase real estate through unlawful means; but due to state requirements not mandating that business owners report personal information voluntarily for scrutiny by government authorities, accessing such details has proven challenging – now more than ever they want access!

The CTA went into effect on January 1st 2024. If you own rental properties through an entity, the CTA mandates three pieces of beneficial ownership information (BOI) be submitted to FinCEN of the U.S. Treasury – here’s a closer look.