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 and what are the specifics? Answer: You can distribute the real estate property from the Solo 401k plan. This is known as an in-kind distribution. An in-kind distribution is still […]
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 trust
The process to purchase real estate (as well as other assets) with your Solo 401k is fairly simple. There is no special real estate contract needed for retirement account purchases, for example. All assets purchased by the retirement account will be titled in the name of the Solo 401k. Example: ABC Ventures 401k Plan. The […]
Converting property in 401k to Roth
My Solo 401k Trust owns a rental property. If I determine that it is better to pay the taxes on the value in the 401k now, could I convert the property and other cash in the account into a Roth 401k without selling and liquidating the property? Yes, you can convert property and other assets […]
Spouse as a realtor for 401k investment property purchase
When I buy investment property in my Solo 401k trust, I will engage the services of a realtor. I would like to use my wife. I understand that many spouse transactions are prohibited. But in this case, the seller pays the commissions so I want to confirm if that would be allowed. Answer: No. Your […]
What determines the taxation rate applied to profits for financed properties?
A qualified plan (such as the Solo 401k) is exempt from the UBTI related to buying property with financing. For an IRA LLC however, the taxation rate is determined by the amount of leverage you’re using. For example, if eighty percent is leveraged and twenty percent of cash is put into the property, then eighty percent […]
Changing the adopting business
I currently have a Solo 401k, under one self-employment business. If I have another business, can I change the adopting business of the Solo 401k to that other one? What if I am closing my self-employment business, but don’t have another? If you have another self-employment business Yes, the adopting business of your Solo 401k […]