Personal involvement with 401k investments

How much can I be personally involved with my Solo 401k investments? Can I manage properties owned by my 401k? What can I do and not do when it comes to managing the properties?

You are a disqualified person with respect to the investments of the 401k, so you want to be careful as to your personal involvement.

The following would be prohibited transactions:

• You personally stay in a property owned by the 401k
• You receive compensation for activities performed (e.g. managing properties) for your 401k
• Even if you were not paid, there would still be a concern that you are receiving indirect compensation, because you are performing services that would otherwise have to be paid for. Your services can be considered non-cash contributions to the plan.

Minimal services performed, however, may not rise to the level of prohibited transactions.

You can use the following rule of thumb when determining your involvement with Solo 401k investments: white collar activity is okay; blue collar activity is prohibited.

Examples of white collar activity

• Managing your 401k accounts
• Making transfers
• Consulting with your CPA
• Writing checks
• Paying bills
• Hiring and negotiating with contractors for properties owned by the 401k
• Screening tenants and collecting rent for properties owned by the 401k
• Or the 401k can hire a property manager for those properties

Examples of blue collar activity

• Painting the property personally
• Fixing the plumbing
• Mowing the lawn
• Any other repair or maintenance activities for the properties

https://www.sensefinancial.com/solo401k/solo-401k-prohibited-transactions/