There has been much discussion around the impending requirement for privately held businesses to begin reporting beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN) in 2024. Yet, many are unaware this requirement is not limited to “businesses.” It applies equally to limited partnerships and limited liability companies frequently used to hold second homes, vacation and rental properties, farms, timber land, and other real estate.

As part of the Anti-Money Laundering Act of 2020, Congress passed the Corporate Transparency Act, creating uniform ownership reporting requirements for all U.S. corporations, limited partnerships, limited liability companies, and other entities formed by filing a document with the Secretary of State of any state or similar state or tribal office. The law also applies to foreign entities that register to do business by filing with a state or tribal office.

Any entity formed prior to Jan. 1, 2024, will be required to file an initial report before the end of 2024. Entities formed after that date will be required to file within 30 days following formation. All filers must update their filings within 30 days following any change in reported information, including such minor items as a change in an owner’s address.

The report must include:

  • The entity’s name and any trade names or DBAs
  • The entity’s complete current street address (U.S.)
  • The entity’s jurisdiction of formation
  • The entity’s taxpayer identification number
  • The legal name, date of birth, and complete residential address of each person owning 25% or more of the entity; and
  • A photocopy of a nonexpired driver’s license, passport or other government-issued identification for each owner of 25% or more of the entity.

Where an owner is a minor child, information for the parent or legal guardian will be reported instead.

Although reporting will begin in January, landowners may want to begin collecting this information now, to be ready when the reporting window opens. In addition, owners of entities that are no longer needed may want to consider dissolving before year-end to avoid having to file at all.