I'm getting ready to file Form 5500-EZ and need help calculating the plan assets of my 401k. I used some of the funds for a down payment to purchase an investment property. The rest of the purchase price was financed using a hard money loan. My wife doesn't have any investments at this time, just some cash. How do I calculate the net plan assets?
First, you must calculate the total plan assets. To do so, simply add up all assets plus cash for all participants. Please note that if the total plan assets exceed $250,000, you are required to file Form 5500-EZ.*
For properties owned by the 401k, the value of each property will need to be based on other properties in the area- real estate comps, CMA, broker's price opinion or a third-party appraisal can be obtained.
Your plan owns a property valued at $220,000. There is $15,675 of cash in your checking account for the 401k. Your spouse has $18,000 cash in her 401k account. There is a mortgage note against the property for the amount of $120,000.
Total plan assets will be calculated as:
+ $220,000.00 Value of the property
+ $15,675.78 Cash in your account
+ $18,000.13 Cash in spouse's account
Total plan assets: $253,675.91 (Note: since the total exceeds $250,000, you are required to file the 5500-EZ)*
- $119,841.09 Mortgage against the property (Total plan liabilities)
Net plan assets: $133,834.82
* Please see our detailed instructions on how to complete Form 5500-EZ below. On the form, you are required to enter a single number for total plan assets, then total plan liabilities, then net plan assets.
Annual Filing Requirement