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Calculating plan assets

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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?

To calculate the total plan assets of the 401k, add up all assets plus cash for all participants. 

Form 5500-EZ is for the entire plan, i.e. for all participants, combined. If the total plan assets exceed $250,000, you are required to file Form 5500-EZ.

Form 5500-EZ Instructions

Include all assets of the plan

  • Cash in all accounts of the 401k, for all participants of the 401k
  • For properties owned by the 401k, the value of each property will need to be based on other properties in the area. This can be based on:
    • Real estate comps
    • CMA
    • Broker's price opinion
    • Or a third-party appraisal

How do I value real estate in my Solo 401k plan?

Example

  • Your 401k 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

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