Let's say that someone has limited funds in their account, they deposit a large check, the financial institution places a hold on this. After the hold is removed that person comes in and withdrawals cash which required a CTR to be filed but not the whole amount on the check. Item 32 on a CTR is "Negotiable Instrument(s) Cashed". Should this be checked even though the check was deposited and now the cash is being withdrawn due to a hold?

That would be considered a withdrawal.

(Assuming the hold was for a certain amount of business days and the customer withdrew the funds from said check at least a day after the deposit.)

No. There are two distinct transactions: (1) the deposit of the check, which is not reportable; and (2) the withdrawal of cash in excess of $10,000, which is reportable.

As it happens, if the deposit was to a checking, NOW or MMDA account and the cash withdrawal was completed by check drawn on that account, the preferred way to categorize the transaction is as a Negotiable Instrument Cashed. If, however, the cash was withdrawn using a teller form or a non-negotiable "counter check," you should describe it using "Deposit/withdrawal."

The hold is what's often called a "red herring" in this scenario. It looks like a significant fact, but it has no relevance to the discussion.

One significant scenario I omitted. Very true, very true... Sorry about that. Do I get the 'Monday' free pass?

No pass needed. We've all been there.

Thank you both for your quick responses!!