In my lengthy career as a Commercial Banker I have seen this type of transaction a few times
1 ] No , I doubt very much that such a transaction even if for " cash " is anything close to a " Money-laundering " scheme . Calling a purchase of real estate a ' cash " deal only means that there is no loan involved to acquire the property . Even a " money-launderer would not be making this public type of transaction with a suit-case full of cash
2] usually when you come across this type of situation there is another " part of the deal " involving a separate piece of income producing real estate or as is often the case a viable successful ongoing business .
3] The " other " part of the deal involves selling say an ongoing business at it`s " Net asset value " which leaves no capital gains to be subject to income taxes . The " Cash flow " value of the business say in this case about $500,000 is added into the price of a home residence .
4] Recall that a Homeowner over the age of 55 who has lived in their residence for 2 years or more can claim a one time tax exemption for the Capital Gains they might realize upon sale of their home .
5] So......... say I own a business which at market is worth about $750,000 as a going concern . say the physical assets of the business are worth about $250,000 . if I sold the business for $750K , I would be subject to long term gain taxes on the $500K over and above the book value which is $250K .
6] So as part of my negotiations I agree to sell the business for only $250K [ book value ] , if and only if the buyer also agreed to purchase my residence for $500K more than it might be appraised for .
7] Net result , I sell my business and my residence and avoid any Capital Gain Taxes .
8 ] Now before every former CPA , Lawyer et al come at me : I have seen this done in " real life " 2 or 3 times . The deals took place in the Buffalo area and also took place almost 10 years ago . So I would not be in the least bit surprised if the " Tax -Folks " have by now figured out how to prevent such structured transactions . Then again ..................