Cash Reporting

Cash Reporting: Overview

Section 6040 [1] of the Internal Revenue Code (Title 26 USC) was added by the tax reform act of 1984. The IRS uses this information to track money laundering and other illegal activities.


Pursuant to the above, any title insurance agent, settlement agents, escrow company, or law firm providing closing and settlement services for the purchase and sale of real property receiving more than $10,000 in cash in a single transaction, or related transactions, must report the cash transaction to the Internal Revenue Service. The form provided for this purpose is IRS Form 8300, pictured below. The definition of “cash” for reporting purposes includes coins and currency of the United States (and any other country). However, this definition may also include certain cashier’s checks, bank drafts, traveler’s checks, and money orders for amounts of less than $10,000 which total in aggregate, more than $10,000. Cashier’s checks, bank drafts, etc., for amounts less than $10,000 are not considered cash when delivered for the purpose of real property.


Personal checks drawn on an individual’s personal account for any amount are not considered to be cash. Cashier’s checks, bank drafts, traveler’s checks, or money orders in an amount of more than $10,000 are not considered to be cash. (The logic is that it is assumed the banking institution responsible for issuing the draft for more than $10,000 will be responsible for reporting the matter to the IRS.) Also, cashier’s checks, bank drafts, etc., which constitute the proceeds of a bank loan in any amount, are not considered cash.