Buying with paper cash?

[Eugene]

Hello, is there any legal way I can buy an apartment all-cash $200K, but about 70% in bank and 30% paper cash?

Can it add any value to the offer?

Is there any risk?

Thanks for any advice.

[lower_nyc]

Interesting question! Are you suggesting making the 'contract price' of the purchase just 70% of $200k (so $140k), and then making a side payment to the seller for the remaining $60k?

Legality aside, you'd obviously need the seller to agree to do this. However, most sellers probably won't want to take so much cash because banks are required report any cash deposit of $10,000 or more to the IRS under the Currency and Foreign Transaction Reporting Act of 1970. This means that the seller would either have to keep $60,000 in cash, or risk possibly being investigated by the IRS once they try and deposit the cash into the bank.

Artificially reducing the contract price may also run afoul of tax law, as it would theoretically reduce any capital gains tax bill owed by the seller after closing....

Certainly suggest you speak with a real estate attorney, accountant and tax lawyer before doing this!

[Eugene]

Thank you for the advice.

As the scenario, I thought not to artificially reduce the contract price, but just make the paper cash as part of the contract. On the closing, I would pay a check and/or paper cash in the presence of a notary who evidences what the paper cash was paid in full.

The parer cash may be considered as the real solid money, which can be spent almost everywhere. Many retailers and services even giving lower cash-price, so having cash may be no so bad. Of course, it will fully depend on buyers intentions and goals.