Humber/Ontario Real Estate Course 4 Exam Practice

Which of the following would require preparation of a large cash transaction report under FINTRAC regulations?

1. A cash payment of $7,500 received for a real estate transaction.

2. A single cash payment of $10,000 or more received for a property deal.

3. An EFT transfer of $9,000 for a purchase.

4. A series of cash payments totaling exactly $10,000 for a transaction.

5. An electronic payment exceeding $15,000.

6. A cash payment of $5,000 coupled with another $5,000 payment for two different transactions.

The correct answer is: A single cash payment of $10,000 or more received for a property deal.

The correct answer involves the requirement under FINTRAC regulations regarding transactions involving cash. Specifically, a single cash payment of $10,000 or more triggers the need for a large cash transaction report. This is due to regulatory measures designed to combat money laundering and other financial crimes, where such large cash transactions could potentially indicate suspicious activities. FINTRAC, the Financial Transactions and Reports Analysis Centre of Canada, sets these thresholds to monitor and report significant cash transactions for enhanced transparency and tracking in the financial system. A single cash transaction equal to or exceeding $10,000 is significant enough to warrant reporting, regardless of the nature of the transaction, be it real estate or otherwise. In contrast, the other scenarios either do not meet the cash threshold for reporting or involve different types of transactions like electronic funds transfers that are not subject to the same reporting requirement, such as the EFT transfer of $9,000. Other instances of cash payments, when aggregated, still require consideration of whether they are considered a single transaction or not, as seen with the two $5,000 payments for different transactions, which by themselves do not meet the threshold nor constitute a single event requiring reporting.