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, not as cash.

• In-kind distributions are still subject to income taxes and early distribution penalties, if you are under normal retirement age at the time of the distribution

Distributions from the Solo 401k

• Before processing an in-kind distribution from your Solo 401k plan, the real estate property must be appraised in order to ensure the correct value. This will determine the income tax and early distribution penalty is paid.

Not obtaining an appraisal on the property prior to the in-kind distribution may subject you to payment of back taxes, if the real estate property was worth more at the time of the distribution.

• The end result is that you own the real estate property personally, outside of the 401k
• As your personal possession, the usage of the real estate property would no longer be subject to prohibited transaction rules. You could use it personally (as residence or rental property, for example) because it is no longer held in the 401k.