It's legal to keep money in a safe deposit box

DEAR BRUCE: Is it illegal to hold U.S. currency in a safe deposit box? I don't mean thousands of dollars. I am aware of the rules about money laundering, but I mean a sum of cash for holding until I decide where I want to place it. — E.G., via e-mail

DEAR E.G.: You are allowed to put as much money as you choose in as many safe deposit boxes as it takes. There is nothing whatsoever illegal about this. The source of the money is another problem. It could be money on which you didn't pay taxes, or money hidden from a spouse that one is divorcing. There are many legitimate reasons why you may have plenty of cash around, and there are no rules about money laundering as you are describing.

Should you be accused of some other crime and a responsible judge has executed the appropriate search warrants, you may be asked about the money's origin. Your attorney can tell you whether you have any obligation to respond.

On the other hand, if you deposit more than $10,000 in cash into your account, the bank is obligated to notify the IRS and Homeland Security. If you leave the country with cash, you can take a full pillowcase perfectly legally, but you must declare the amount with the authorities when you leave the country. Similarly, if you are coming back from a cruise, you can legally have a steamer trunk full of money, but you must make the authorities aware that you are transporting it. The act of transporting or storing money is perfectly fine as long as you dot the i's and cross the t's.

Send your questions to: Smart Money, P.O. Box 2095, Elfers, FL 34680. E-mail to: Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.

Reader Reaction
We reserve the right to remove any content at any time from this Community, including without limitation if it violates the Community Rules. We ask that you report content that you in good faith believe violates the above rules by clicking the Flag link next to the offending comment or fill out this form. New comments are only accepted for two weeks from the date of publication.