FinCEN Real Estate Rule Exemptions and Exceptions

Exemptions and exceptions are the core of the rule

The rule contains several explicit exceptions where a transfer is not reportable even if it involves residential real property. These exceptions are important because they cover common real-world scenarios such as transfers by operation of law, court involvement, and certain structured exchanges.

The checker routes to an exempt determination only when one of these categories applies based on the selections made.

Common exception categories

Examples of exception categories include easements, transfers resulting from death, transfers incident to divorce or dissolution, transfers to a bankruptcy estate, court-supervised transfers, and transfers to a qualified intermediary in a 1031 exchange. Each category is defined by the rule, and details matter.

If you are uncertain whether an exception applies, use the checker to document the best available facts and keep the selections on file.

Exemption certificate for your file

When a transfer is determined to be exempt, you may generate an exemption certificate. The exemption certificate lists the selections made during the determination flow so the reason for exemption is clear and auditable.