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Afraid I made a huge mistake with large cash on hand - need advice

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rated:
Hi,

I am purchasing a car this week.  Unbeknownst to me up until last month, my family has been putting aside $21K over time to pay for half the car.  So I have been shopping with that in mind.  I was originally going to use my stocks.  Awesome right?

Wrong I think.  I was going to go pay for half in cash from my family and half with cash I would withdraw from the bank.

Well I was told that if I do a large cash deposit in a bank or especially at a car dealer... it is a big nono.  I have the money to buy in stocks and other assets, however not readily available as needed for purchase as i was counting on using this as half the payment.

Now I have 21k sitting in a safety deposit box and I am afraid to touch it.  I was counting on it to make the purchase.  I am afraid to deposit it.  I'm afraid to use it at the dealership.  It almost feels like i'm a criminal and I'm just stuck.  It's just there.  Sure I could spend it down over time but that will take forever and a day.

I looked into making smaller deposits to get it all in the bank but that apparently according to business insider can get your whole bank account confiscated with no court action and is called snarfing.

I don't know what to do?  how much can i deposit.  i thought it was 10k, but they said anything over 7k will get you looked at up to the banks judgement.  How can i use this money and buy the car.  i'm so confused.  I don't want to give there money back and make it their problem.  they did this out of love and I feel like now I am coming off ungrateful.  I'm just scared.  I should have declined their money, but lets be honest.  That money will help a lot and they did it to help, not stress me out.  I haven't even talked to them about it because i don't want them to know i'm all stressed out.

What do I do? This isn't drug money or a money laundering operation.  I don't have a sex trafficking ring.  I just have a really cool immediate family that knew i had a rough year and decided to help me out financially since they can't be here to help with the divorce and custody issues that really took an emotional toll on my spirit.  I really do appreciate it, I do not want to sound ungrateful or like a spoiled jerk.  But now I feel trapped and helpless.  The money is right there, apparently I just can't use it.  I don't want them to get in trouble either.  The money has stayed in the family and it's not like it's leaving the country or the state.  I must sound like an idiot.  I heard about this place from some more financially savy coworkers.  I make 6 figures so money is coming in, but it's all direct deposit and I never make cash withdrawals.

Thanks for reading my scattered thoughts.

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rated:
If you are doing this ONCE, the bank will ask you where the funds came from and make a form.

If you are doing this a lot, then yeah, they might seize it.

May I ask why you can't write a check then?  It's better than giving cash to a dealer.

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Hi Thanks for responding!

I can do a cashiers check, or whatever is best. However, I still have the large lump sum to deal with and it will hit my account pretty hard since I wasn't planning on spending so much from my account. They thought that I could get a better deal walking in with cash. I was under the same impression that at a dealer cash is king.

So you think if I walk into a bank and drop of 21k, I'll be fine? Do i get taxed on that?

Signed confused

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There is nothing to worry about. Deposit the money. Get a check. End of story.

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Why do I get the feeling that spending 42k on a new car is the real 'huge mistake' here? What % of your assets is that 42k?

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Why didn't your family write you a check?

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Nothing wrong with having cash, it's just not safe from crime, accident, or disaster.

You also need to educate your family about not having that much cash around. Around here, certain culture has been targeted for home invasion and robbery because criminal knows they tend to keep cash and gold around the house.

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Just deposit the cash. This is not hard. Banks don't "judge" you (well, not about this at least).

They're required to report deposits over $10k, or suspicious deposits in any large amount that appear to structured (hence term structuring) to avoid the $10k reporting requirement. DO NOT DO THIS. That can provide a reason for the government to seize the cash. Just do a single deposit with a bank teller and you're done. Keep the receipt until it posts in your account.

Depositing gifts from family is in NO way suspicious. There is no stress other than you using misinformation to stress yourself out. Relax, nothing criminal or remotely criminal about it. Enjoy the gift and the $40k car (different topic).

The only consideration is your family might owe taxes on the gift. The first $14k gift each year are tax free. If this is from your parents, they can combine their $14k gift tax exclusion to $28k in a calendar year. There is NO reporting requirement for gifts under this limit. If the gift was from several family members, and no one's portion was over $14k, then also no reporting requirement. Hopefully not an issue, and it is nothing for you to worry about.

The bank will fill out a small form/report, will likely ask for your driver's license or other ID. Not hard. People deposit lots of cash all the time.

Even if you wanted the money to leave the country or state, also not a problem in USA. Again, just a form (if anything) might be required. Currency controls here are VERY low compared to most of the world.

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I haven't kept up with tax laws in regards to deposits since I used to have a lot of cash on hand (pre marriage bartender). I lived on cash. But the rule then was never deposit more than 10k or you're asking for trouble. Now I'm a big boy with a big boy job and I have direct deposit. So I have no worries about large deposits like when I kept my money in a sock (I know I know).

I would just put that in a safety box like you did and take it out as you need it for food and gas and other small ticket items. It's gonna take a while and you won't be getting any "points" from using your cards, but you and your money will be safe.

There's always strippers if you wanna spend down fast. Few lap dances should drain it quick.

Joking aside, can you afford that purchase? Your gonna catch some crap because most here are frugal and driving a crown vic intercepted or an old Toyota. Good luck.

Edit. To the poster above me. Wouldn't the recipient of the gift (the OP) get taxed, not the gifters? also just a thought here, your family may get looked at funny as to why they had so much cash.

Btw, cool family. Are they looking to adopt? I could use some money for a new car

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Banks are required to file FINRA's(?) for deposits over $10k. As long as the money comes from a reasonable source you have nothing to worry about. Family is a reasonable source.

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jarfykk said:   The only consideration is your family might owe taxes on the gift. The first $14k gift each year are tax free. If this is from your parents, they can combine their $14k gift tax exclusion to $28k in a calendar year. There is NO reporting requirement for gifts under this limit. If the gift was from several family members, and no one's portion was over $14k, then also no reporting requirement. Hopefully not an issue, and it is nothing for you to worry about.
  Nobody is going to owe tax on a 21k gift. If it is from a single person, at most they (giftor) will have to file a gift tax return and the amount over the annual max. (14k) will count towards the lifetime exclusion.

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datapusher said:   Wouldn't the recipient of the gift (the OP) get taxed, not the gifters?  
  No.

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ZenNUTS said:   Nothing wrong with having cash, it's just not safe from crime, accident, disaster, or the government.
 

  Fixed.

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Some dealers will accept cash, they might even prefer it. Worth asking.

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wonderingpennypincher said:   Unbeknownst to me up until last month, my family has been putting aside $21K over time to pay for half the car. 
 

  Ask family to write you a check. Why is it in cash form to begin with. Do they not have bank accounts? Do they work in business generating cash or make money under the table?

If they simply withdrew cash from their accounts to hand it to you, ask them to put the money back in their account and write you a check.
 

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It came from their banks. However to return a gift for another would be a dishonor.

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wonderingpennypincher said:   would be a dishonor.

I'd rather deal with dishonor than legal trouble and government scrutiny. It's cheaper.

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wonderingpennypincher said:   It came from their banks. However to return a gift for another would be a dishonor.
  Are you a Klingon?

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First of all, CALM DOWN. Sheesh.

The CTR limit is $10k. So yes, if you engage in a cash or cash-equivalent transaction of $10k or more, you'll have a CTR filed. Doesn't matter if it's buying a car or making a deposit to a bank. But if you walk into a bank and act like you sound, I'm guessing they're going to file an SAR on you which has no threshhold at all. The teller can trigger an SAR for $2.51 if she wants to.

What does this mean for you? Only you can answer that. If you're clear with the IRS, then screw em. End of story. Don't tell the IRS that you got the cash all at once as a gift. They don't need to know.  Don't structure, either.  $9999 in one bank and $9999 in the other.  That's a crime.  Make it look legit.  Once the cash is in the system you can just write a check for the car.  Because contrary to popular belief, there isn't a notification when electronic transfers over $10k are done.  Might I suggest, though, that you see if the dealer takes credit cards?  2% on $xx,xxx can be a lot of cash back.

The IRS can have access to your vehicle registration records.  They do NOT have access to your bank balance information nationally, and if you haven't been issued a 1099-INT from that particular bank and it's a bank out of town, they'll never be able to find out about it.  Still want that 911?  Or would you rather invest the USD?

Really, do not expect many helpful responses.  In my short time on this board I've learned that they don't like tax cheats or cash users here. They like to pay the government everything they owe. That's unfortunate. I like to keep my wallet fat via any means available, and I didn't think that FatWallet meant PinkoWallet.

P.S.  It's not my place, but if you're this scared about how to move a few $k, maybe you don't need a car worth more than say $5-10k.  Maybe start small at first and grow into things?  Like I said, none of my business.  Just saying, sir.
 

rated:
Simple solution. Deposit the $21K into your bank and buy the car with a check once it clears.

Agree with others that you should think about whether you should buy a $42K car. If you were going to sell stocks to buy it, that's a big red flag. Obviously, dependent on your income & other expenses.

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wonderingpennypincher said:   

Well I was told that if I do a large cash deposit in a bank or especially at a car dealer... it is a big nono.  

Dare I ask who told you this? It's only "a big no-no" if you have something serious to hide.

.  I'm just scared.  I should have declined their money, but lets be honest.
Seriously, if you are scared and stressed and don't want it, you can give the cash to me.
  

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irate_retro said:   
Really, do not expect many helpful responses.  In my short time on this board I've learned that they don't like tax cheats or cash users here. They like to pay the government everything they owe. That's unfortunate. I like to keep my wallet fat via any means available, and I didn't think that FatWallet meant PinkoWallet.


 

  What helpful responses would you expect, beyond "just use the damn cash to buy your car"?

And the only thing "we" don't like is people who ask questions expecting a specific answer that validates what they already think.  

rated:
Chyvan said:   
wonderingpennypincher said:   would be a dishonor.

I'd rather deal with dishonor than legal trouble and government scrutiny. It's cheaper.

  I'd rather have an extra $21k...

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wonderingpennypincher said:    I was going to go pay for half in cash from my family and half with cash I would withdraw from the bank.
Is this new or used? Are you going to negotiate the price or have you already done that and made the deal? If you're buying a used model that's been sitting on the lot a while, you might get a better deal if you have the cash in your pocket. Dealer won't have to deal with financing you or the risk your check bounces. It's a shame that the anti-money laundering statutes cause such worry amount law abiding citizens, but bring the cash and don't worry about it. It this was such a problem, the guys at Gas Monkey Garage would have been out of business by now.

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If the money is legal, then don't act like a criminal. Deposit it in your bank. They will file some form saying you deposited over $10,000 cash. THIS IS NOT A CRIME. It's kinda like getting a W-2 or 1099, which gets filed with the IRS. Are you worried about that too?

People get so freaked out by the $10K thing.

* None of this applies if you are a terrorist or drug dealer, then I hope you get caught.

rated:
I'll help you out. Give me the $21k cash and I'll give you a certified check for it. It'll just take me a few days after I have to get the check to you, but trust me.

Seriously though, just deposit the cash. Yes there are laws in place to monitor for money laundering/drug money etc. However, one large transaction with a reasonable explanation of where the money came from isn't going to do it. Don't structure the deposits (e.g. Deliberately split the deposit below $10k to avoid reporting) that's illegal in of itself.

Also be careful if you will be driving around with that large of cash. Aside from the obvious risk of theft. A cop pulling you over and seeing $21k cash could result in civil forfeiture. It's unlikely but it happens, and it's a long process to get back, as civil forfeiture basically treats you as guilty until proven innocent.

Best solution, take $2k buy a crown Vic at a municipal auction and invest the other $39k.

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Open up a banana stand.  Put the money in there.
"There's always money in the banana stand."

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9K Cash Deposit to Dealer and Finance the rest.
Break up 12k into 2 deposits and payoff the financing with checks from your account.

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SpiderPKT said:   9K Cash Deposit to Dealer and Finance the rest.
Break up 12k into 2 deposits and payoff the financing with checks from your account.

  Apparently you're not familiar with the term structuring?  

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SpiderPKT said:   9K Cash Deposit to Dealer and Finance the rest.
Break up 12k into 2 deposits and payoff the financing with checks from your account.

  That's the roadmap you don't use...

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The IRS allows each family member may gift up to $14k per year tax-free to any other family member (including multiple family members). Haven't checked whether that figure has gone up in 2017, but it's in the ballpark. You don't have any tax consequences for a gift from a family member, but they (the senders) do need to declare it on their tax forms.

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Please tell me about why I can't just give 40K to a relative and let go at that? Who are the persons that would  know I did ?

Not Trolling

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castaline said:   Please tell me about why I can't just give 40K to a relative and let go at that? Who are the persons that would  know I did ?

Not Trolling
 

  Simply put, no one would know but you and the relative.

That said, if you give them a check or transfer electronically, obviously the bank knows.  If you give cash to prevent a bank from knowing, your relative is stuck with $40K in cash, what are they going to do with it?  As soon as they deposit it then other people / institutions know about it.

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atikovi said:   
wonderingpennypincher said:    I was going to go pay for half in cash from my family and half with cash I would withdraw from the bank.
Is this new or used? Are you going to negotiate the price or have you already done that and made the deal? If you're buying a used model that's been sitting on the lot a while, you might get a better deal if you have the cash in your pocket. Dealer won't have to deal with financing you or the risk your check bounces. It's a shame that the anti-money laundering statutes cause such worry amount law abiding citizens, but bring the cash and don't worry about it. It this was such a problem, the guys at Gas Monkey Garage would have been out of business by now.

As paranoid as this guy is, sending him out on the street with $20k or more in his pocket to buy a used car is horrible advice.  He's going to get robbed or stiffed or taken advantage of.

OP - Just deposit the money in your bank account.  Go find the car you want, and when it comes time to pay, tell them you can write a personal check, wire the money, or go get them a cashier's check.  Simple as that.  Oh, and add me to the list of people who think you shouldn't be buying a $40,000 car.  

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The real mistake here is paying 40k for a car.

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dcwilbur said:   
As paranoid as this guy is, sending him out on the street with $20k or more in his pocket to buy a used car is horrible advice.  He's going to get robbed or stiffed or taken advantage of.

Pretty sure the guy will drive to the sale location, not walking on the street. The only worry there is getting pulled over by the cops with that much cash. And he can get taken advantage of regardless of the form of payment.

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What kind of car is he buying for $42K?

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atikovi said:   
dcwilbur said:   
As paranoid as this guy is, sending him out on the street with $20k or more in his pocket to buy a used car is horrible advice.  He's going to get robbed or stiffed or taken advantage of.

Pretty sure the guy will drive to the sale location, not walking on the street. The only worry there is getting pulled over by the cops with that much cash. And he can get taken advantage of regardless of the form of payment.

Argumentative much?  "On the street" is an expression, as in, "out in public."  And with a pocketful of cash, he is much more likely to get caught up in the moment and spend everything he has.  No car dealer other than some curbstoner is going to give anyone a better deal if they pay cash.  

Skipping 19 Messages...
rated:
irate_retro said:   First of all, CALM DOWN. Sheesh.

The CTR limit is $10k. So yes, if you engage in a cash or cash-equivalent transaction of $10k or more, you'll have a CTR filed. Doesn't matter if it's buying a car or making a deposit to a bank. But if you walk into a bank and act like you sound, I'm guessing they're going to file an SAR on you which has no threshhold at all. The teller can trigger an SAR for $2.51 if she wants to.

What does this mean for you? Only you can answer that. If you're clear with the IRS, then screw em. End of story. Don't tell the IRS that you got the cash all at once as a gift. They don't need to know.  Don't structure, either.  $9999 in one bank and $9999 in the other.  That's a crime.  Make it look legit.  Once the cash is in the system you can just write a check for the car.  Because contrary to popular belief, there isn't a notification when electronic transfers over $10k are done.  Might I suggest, though, that you see if the dealer takes credit cards?  2% on $xx,xxx can be a lot of cash back.

The IRS can have access to your vehicle registration records.  They do NOT have access to your bank balance information nationally, and if you haven't been issued a 1099-INT from that particular bank and it's a bank out of town, they'll never be able to find out about it.  Still want that 911?  Or would you rather invest the USD?

Really, do not expect many helpful responses.  In my short time on this board I've learned that they don't like tax cheats or cash users here. They like to pay the government everything they owe. That's unfortunate. I like to keep my wallet fat via any means available, and I didn't think that FatWallet meant PinkoWallet.

P.S.  It's not my place, but if you're this scared about how to move a few $k, maybe you don't need a car worth more than say $5-10k.  Maybe start small at first and grow into things?  Like I said, none of my business.  Just saying, sir.

  
This (and the poster prior who said something similar) is the right answer.  As an FYI, the acronyms are CTR = Currency Transaction Report and SAR = Suspicious Activity Report in case you want to google and read more about them.  These rules were put in place to deter money laundering, not take away legitimate cash from law abiding citizens.  

Pretty much everything has been said already except I wanted to add that keeping large amounts of cash in your safety deposit box is a bad idea.  It's not prohibited by law, although some banks prohibit it.  However, contents of a safety deposit box are NOT insured.  Deposits in a bank account ARE insured by the Federal Deposit Insurance Corp (FDIC).  So it makes no sense to keep cash in a safety deposit box.  Put it in a bank account where it's safe, insured, and earns interest (albeit not that much right now).  I'm not saying don't keep any cash, they're good for emergencies, but $21k is way too much to be holding uninsured. 

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