Contributions from my corporation
Can you please explain how to make contributions to my 401k from my corporation. Can I get paid by the corporation as an independent contractor via 1099 and then claim the state taxes on my personal return or do I need to do the payroll deductions and submit them to the state? Answer: Since your 401k […]
Peer to peer lending using Lending Club
I’d like to check with you if participating as a lender in peer-to-peer lending platform such as Lending Club will be okay in my Solo 401k. They do support opening a Self-directed IRA account, but I would like to be able to invest directly out of my 401k without opening new self-directed IRA account. Yes, you […]
Paying the fee to setup the plan from the plan
Can the fee to set up the plan be counted as a plan expense and be paid for out of the plan? Answer: Generally, expenses incurred in connection with the establishment, termination and design of the plan relate to the employer’s business activities and should not be paid by the plan. See DOL Advisory Opinion 2001-01A. […]
Choosing a business to adopt your Solo 401k
As an employer-sponsored plan, the Solo 401k requires an adopting business. The adopting business must represent your self-employment. If you have more than one self-employment business that you own, consider the following when choosing which self-employment business will adopt the plan. Adopting business can be any entity type The Solo 401k can be adopted by […]
Recharacterization of Roth conversion
Last December, my accountant grossly miscalculated my tax liability estimate, which led me to believe that a Roth conversion could be made with a manageable tax impact. Later, when she prepared my tax returns in April, I discovered that my tax liability was actually much higher, and that the tax impact of the Roth conversion […]
Private lending from the Solo 401k
Can I do private lending out of my Solo 401k? Yes. You can lend money from your 401k to other non-disqualified persons. As fiduciary of your 401k, you are responsible to invest the plan for its benefit. These loans must be financially advantageous for your 401k, as they are investments of your plan. Your 401k […]
Investing in precious metals
Can I purchase precious metals, such as silver and gold, with my Solo 401k plan? Yes, your 401k can purchase precious metals, such as gold, silver, etc. For example, the coins cannot be “collectibles” per Internal Revenue Code Section 408. Check with your CPA if there are any questions. Plan assets cannot be held by […]
Taking property out of a Solo 401k plan as an in-kind distribution
My Solo 401k plan owns a real estate property. I would like to pull this property out after retirement as a distribution. Can I do that? Yes, you can distribute the real estate property from the Solo 401k plan. This is known as an in-kind distribution because it is distributing an asset from the plan, […]
Using Solo 401k to flip a house
With a Solo 401k, flipping homes or engaging in a real estate transaction is as simple as writing a check. As a trustee of your Solo 401k Trust you have the authority to make real estate investment decisions on behalf of your Solo 401k Trust. However, when engaging in a transaction such as flipping a […]
Titling real estate in the Solo 401k
Your 401k is a retirement plan trust and allows the holding of real estate in the trust (Defined Contribution Trust Document, Article IV, Section 4.2(a)&(f)). Purchasing real estate with your 401k does not require a different or special process. The 401k is purchasing the real estate, not you personally. The buyer will be the 401k […]