The 2024 Corporate Transparency Act: Alert for CA Business Owners

STATUS ALERT As of March 26, 2025, U.S.-formed entities (LLCs, corporations, partnerships) are no longer required to file Beneficial Ownership Information (BOI) reports with FinCEN under the Corporate Transparency Act. This exemption is the result of FinCEN’s interim final rule issued that date. A separate FinCEN real estate reporting rule, unrelated to the CTA, takes effect March 1, 2026, and does apply to certain California property transfers.

When the Corporate Transparency Act (CTA) took effect in 2024, it required millions of small businesses across the United States, including California LLCs and corporations, to disclose their beneficial owners to the federal government. The law aimed to combat money laundering and financial fraud by lifting the anonymity that corporate structures can provide.

Since then, the legal and regulatory landscape has changed substantially. Federal courts issued a series of conflicting injunctions, the U.S. Supreme Court weighed in, and the Trump Administration ultimately directed FinCEN to exempt domestic entities from the reporting requirement entirely. As of March 2026, most California small businesses have no active obligation under the CTA.

However, a separate FinCEN rule affecting real estate transfers to trusts and LLCs took effect March 1, 2026. California families and business owners who own or acquire residential property through a trust or entity need to understand this rule, which is distinct from the CTA and remains fully in force.

KEY TAKEAWAYS Quick facts before you read on:

• The CTA’s BOI reporting requirement no longer applies to U.S.-formed entities. FinCEN’s March 2025 interim final rule formally exempted all domestic companies.
• Only foreign entities that have registered to do business in a U.S. state remain subject to BOI filing requirements under the current rule.
• A separate FinCEN Residential Real Estate Rule took effect March 1, 2026, and applies to non-financed transfers of residential property to trusts and LLCs.
• The RRE Rule is issued under the Bank Secrecy Act, not the CTA, and was not affected by the CTA litigation or the domestic exemption.
• California families who hold or plan to acquire residential real estate through a trust or LLC should review their ownership structure before their next transfer.

Current Status: FinCEN BOI Reporting Requirements as of March 2026

The table below summarizes what is currently required, who is affected, and the current status of each FinCEN reporting obligation relevant to California small business owners and estate planning clients.

Background: What the Corporate Transparency Act Was Designed to Do

The Corporate Transparency Act was enacted as part of the National Defense Authorization Act for Fiscal Year 2021. Its primary objective was to require certain U.S. business entities to disclose their beneficial owners to FinCEN, the Financial Crimes Enforcement Network, a bureau of the U.S. Department of the Treasury.

The law targeted anonymous ownership structures that law enforcement agencies had long identified as vehicles for money laundering, terrorism financing, and other financial crimes. By requiring companies to identify the individuals who ultimately own or control them, Congress intended to make the United States a less attractive jurisdiction for illicit financial activity.

The CTA defined a “reporting company” broadly to include corporations, LLCs, and similar entities formed by filing with a secretary of state. It required these entities to report the full legal name, date of birth, address, and a government-issued identification number for each beneficial owner, meaning each individual who owns 25% or more of the entity or who exercises substantial control over it.

What Was a Beneficial Owner Under the CTA?

Under the original CTA framework, a beneficial owner was any individual who either:

• Owned or controlled at least 25% of the ownership interests in the reporting company, or
• Exercised substantial control over the reporting company, which included senior officers, individuals with authority to appoint or remove officers, and anyone with significant influence over major decisions.

This definition was designed to capture the actual human beings behind corporate structures, even when ownership was layered through multiple holding companies or trust arrangements.

The Litigation History: How the CTA Reached Its Current State

Beginning in late 2024, the CTA’s BOI reporting requirement was challenged in multiple federal courts. The litigation produced a series of conflicting orders that created significant compliance uncertainty for businesses across the country. The timeline below summarizes the key developments.

The practical result of this sequence of events is that domestic U.S. entities have not been required to file BOI reports since December 2024, and as of March 26, 2025, are formally exempt under FinCEN’s interim final rule.

What the FinCEN Interim Final Rule Actually Says

On March 21, 2025, FinCEN issued an interim final rule that fundamentally narrowed the definition of “reporting company” under the CTA. The rule was published in the Federal Register on March 26, 2025.

Domestic Entities: Fully Exempt

Under the interim final rule, all entities created in the United States, including those previously classified as domestic reporting companies, are formally exempt from the BOI reporting requirement. This means California LLCs, California corporations, California limited partnerships, and all other entities formed by filing with the California Secretary of State no longer have any BOI filing obligation under the current rule.

Foreign Entities: Still Subject to BOI Requirements

Foreign entities that have registered to do business in a U.S. state or tribal jurisdiction by filing with a secretary of state or similar office remain subject to the BOI reporting requirement, subject to applicable exemptions. For these entities, the following deadlines apply:

Importantly, foreign reporting companies are not required to report U.S. persons as beneficial owners, and U.S. persons are not required to provide BOI with respect to a foreign reporting company in which they have an ownership interest.

The Constitutional Question: Not Fully Resolved

The domestic exemption is a regulatory decision, not a court ruling that the CTA is unconstitutional. The Eleventh Circuit held in December 2025 that the CTA is a constitutional exercise of Congress’s Commerce Clause authority. Whether the CTA’s full domestic reporting requirements could be reinstated through future rulemaking remains legally possible, though the current administration has shown no indication of doing so.

Are Trusts Covered by the Corporate Transparency Act?

Most trusts are not directly classified as “reporting companies” under the CTA because they are typically not formed by filing a document with a secretary of state. A standard California revocable living trust, for example, is created by a trust agreement, not a state filing, and does not independently qualify as a reporting company.

However, trusts can be indirectly involved in CTA compliance in two ways. First, if a trust holds an ownership interest in an entity that is (or was) a reporting company, the trustee or other individuals exercising control over the trust’s ownership interest may qualify as beneficial owners of that entity. Second, certain business trusts formed by state filing may themselves be reporting companies.

Under the current interim final rule, neither of these scenarios creates an active domestic reporting obligation. But trustees and beneficiaries of trusts that own interests in foreign reporting companies should review their obligations carefully.

What Still Applies: The FinCEN Residential Real Estate Reporting Rule

Entirely separate from the CTA, and unaffected by the CTA litigation, is the FinCEN Residential Real Estate Rule. This rule was issued under the Bank Secrecy Act, finalized in 2024, and took effect March 1, 2026, after a postponement from the original December 2025 effective date.

California families and business owners who hold residential property through a trust or LLC, or who plan to purchase residential real estate through one of these structures, need to understand this rule before their next transaction.

What Transactions Are Covered?

A transfer triggers the RRE Rule when all of the following conditions are met:

• The property is residential real estate, generally defined as one-to-four family units, including single-family homes, condos, co-ops, townhouses, and certain vacant land intended for residential construction.
• The transfer is non-financed, meaning it does not involve a mortgage or institutional loan from a regulated lender. This includes all-cash purchases, gifts, seller-financed deals, and private loans.
• The property is transferred to a legal entity or trust, such as an LLC, corporation, partnership, or trust. Transfers directly to individuals are not covered.
• No applicable exception applies.

Key Exceptions Relevant to California Estate Planning

Several exceptions are particularly important for California families:

Who Has to File the Report?

The reporting obligation falls on real estate professionals involved in the closing or settlement process, not directly on the property owner or buyer. FinCEN uses a “reporting cascade” that assigns primary responsibility to the professional who performs the highest-ranked function on a list of seven closing roles, with settlement agents and title companies typically carrying primary responsibility.

Closing attorneys who record deeds can be pulled into the cascade in certain situations. This means that in California transactions where an attorney is involved in the closing, the attorney may become the reporting person.

What Information Must Be Reported?

When a transfer is reportable, the reporting person must submit to FinCEN information about:

• The property being transferred, including address and legal description.
• The seller and the transferee entity or trust.
• The beneficial owners of the transferee entity or trust, including full legal name, date of birth, address, and a government-issued identification number for each.

Reports must be filed through FinCEN’s BSA E-Filing System by the later of 30 calendar days after closing or the last day of the month following the month of closing.

Frequently Asked Questions: CTA and FinCEN Reporting for California Business Owners

Does my California LLC still need to file a BOI report with FinCEN?

No. As of March 26, 2025, all entities formed in the United States, including California LLCs and corporations, are exempt from the BOI reporting requirement under FinCEN’s interim final rule. You do not need to file, and you are not subject to penalties for not filing. FinCEN has stated it intends to finalize this rule in 2026, but no active domestic reporting obligation exists at this time.

What if I already filed a BOI report before the exemption?

If you filed a BOI report with FinCEN before the domestic exemption took effect, that filing remains on record. FinCEN has not indicated that previously filed reports need to be withdrawn or corrected solely because domestic entities are now exempt. There is no current obligation to update or delete a previously filed report, though you should monitor FinCEN guidance for any further direction on this point.

Is the Corporate Transparency Act still a law?

Yes. Congress has not repealed the CTA, and the Eleventh Circuit held in December 2025 that it is constitutional. The domestic exemption currently in place is an administrative decision made through FinCEN rulemaking, not a court ruling that the law is invalid. In theory, a future administration could issue new rulemaking to restore domestic reporting requirements, though doing so would require a new rulemaking process.

My business is a foreign entity registered in California. Do I need to file?

Possibly yes. Foreign entities that registered to do business in a U.S. state by filing with a secretary of state or similar office remain subject to BOI reporting requirements under the current rule, subject to applicable exemptions. If your entity was formed under the law of a foreign country and registered in California, you should review your obligations with a qualified attorney. Foreign reporting companies registered before March 26, 2025, were required to file by April 25, 2025.

Does my revocable living trust need to report anything to FinCEN?

A standard California revocable living trust is not a reporting company under the CTA and has no BOI filing obligation. However, if your trust holds an interest in a foreign reporting company, or if you are purchasing residential real estate through your trust using cash or private financing on or after March 1, 2026, the FinCEN Residential Real Estate Rule may require a report to be filed by the settlement agent or title company at closing.

What is the FinCEN Residential Real Estate Rule and does it replace the CTA?

The RRE Rule and the CTA are separate regulations with separate legal bases. The CTA was issued under a specific Congressional mandate to collect beneficial ownership data on business entities. The RRE Rule was issued under the Bank Secrecy Act and specifically targets money laundering in the residential real estate market through all-cash or non-financed transfers to trusts and entities. The CTA litigation and the domestic exemption have no effect on the RRE Rule.

I am transferring my home into my revocable trust. Does the RRE Rule require a report?

Generally no. The RRE Rule includes a specific exception for transfers where an individual, alone or with their spouse, transfers residential property into a trust for no consideration, and the individual is the settlor or grantor of that trust. This covers the standard estate planning funding deed used to move a home into a revocable living trust. Confirm that your transaction fits the exception with a California estate planning attorney before closing.

What if I am deeding residential property into an LLC?

Transfers to LLCs do not have the same grantor exception that applies to revocable trusts. If you are deeding residential property into an LLC through a non-financed transfer on or after March 1, 2026, the transaction may be reportable under the RRE Rule, even if no money changes hands. The reporting obligation falls on the settlement agent or closing attorney, but the beneficial owners of the LLC will need to provide identifying information for the report.

Will there be more changes to FinCEN requirements in 2026?

Yes, further developments are expected. FinCEN has indicated it intends to finalize the interim final rule exempting domestic entities in 2026. Additional appellate decisions on the CTA’s constitutionality are anticipated. The RRE Rule is also new, and FinCEN may issue further guidance as the rule goes into effect. California businesses and property owners should monitor FinCEN’s official website and consult qualified counsel for updates.

What California Business Owners and Families Should Do Now

The regulatory picture as of March 2026 is relatively straightforward for most California-based businesses: no active BOI reporting obligation exists under the CTA for U.S.-formed entities. However, the situation remains fluid, and the new real estate reporting rule creates a concrete action item for anyone who owns or plans to acquire residential property through a trust or entity.

• If you own a California LLC or corporation: No BOI filing is currently required. Maintain your standard Secretary of State filings and monitor FinCEN for any changes to the domestic exemption.
• If you own residential real estate through a trust or LLC: Review your ownership structure and any planned transactions before March 1, 2026. Confirm whether your next transfer is subject to the RRE Rule and ensure your beneficial ownership information is current and organized.
• If your entity is foreign-formed: Confirm whether you are a foreign reporting company under the current rule and whether your BOI filing obligation has been satisfied.
• If you are purchasing residential property: Coordinate with your escrow, title company, and real estate attorney regarding RRE Rule compliance. In California, the California Association of Realtors has issued a new Federal Reporting Requirement Purchase Addendum (Form FRR-PA) that is being incorporated into purchase agreements.

Opelon LLP helps families and business owners throughout Carlsbad and San Diego County navigate estate planning, trust administration, and probate. If you have questions about how the FinCEN real estate reporting rule affects your trust or LLC property holdings, call (760) 278-1116 or visit opelon.com to schedule a consultation.

Legal Disclaimer

This article provides general information about the Corporate Transparency Act and related FinCEN regulations and is for educational purposes only. It does not constitute legal advice and does not create an attorney-client relationship. Federal regulatory requirements are subject to change; this article reflects the status of FinCEN rules as of March 2026, including FinCEN’s interim final rule published March 26, 2025, and the Residential Real Estate Reporting Rule effective March 1, 2026. The regulatory landscape remains active. Consult a qualified California attorney and, where applicable, a compliance professional before making decisions based on this information.

About the Author

Matt Odgers, Esq. is a Founding Partner at Opelon LLP, a trust, estate, and probate law firm based in Carlsbad, California. A San Diego County native who grew up in Ramona, Matt earned his J.D. from Thomas Jefferson School of Law and holds a B.A. in Political Science from Purdue University. He has been recognized by Best Lawyers: Ones to Watch in America (2026), the Carlsbad Chamber of Commerce 40 Under 40 (2023), and Super Lawyers Rising Stars (2017, 2018, 2019). California State Bar No. 290722.

Last Updated: March 2026