Answer:
Since the source of funds originates with a check(s) being deposited, it would be a negotiable instrument cashed. The FinCEN XML User Guide for CTRs defines:
Negotiable Instruments – All checks and drafts (including business, personal, bank, cashier’s and third-party), money orders, and promissory notes. For purposes of this FinCEN CTR, all traveler’s checks shall also be considered negotiable instruments whether or not they are in bearer form.
A further general way to distinguish between the two categories: If it’s a check with a routing number and account number on the bottom, it’s a negotiable instrument. If it’s an over the counter withdrawal slip, it is a withdrawal.
Given this specific scenario, the customer made a deposit with cash back. The source of funds is not the customer’s account, but a check, which was negotiated to deposit some of the funds and take the rest back in cash. Thus, since the source of funds is a negotiable instrument, you would want to list this amount under *27d negotiable instrument cashed. If this is a transit check, there is no account number listed under the subject. If this was a check issued by your institution, you would list an account number under the subject. The cash back would not be listed as a withdrawal.
Please keep in mind the account number expectations are different for a SAR.
