Author Archives: Mark Nolan

Can a Solo 401k Invest in Annuities?

QUESTION: For solo 401k, are we allowed to invest in annuities?  ANSWER: Yes, a solo 401k may be invested in annuities whether fixed or variable annuities. Owner: When a solo 401k plan invests in an annuity, the annuity is owned by the solo 401k plan. This means the annuity policy is required to reflect the […]

Can i transfer a former employer 401k participant loan to the solo 401k?

QUESTION: I have an outstanding loan with the current 401k. Can it be transferred as well to the self-directed solo 401k, or does it need to be paid off ? ANSWER: Yes, if the participant loan in your former employer’s 401k plan is in good order and the former employer allows you to transfer it. […]

Are we in violation if the rent payments are sent to our personal account and then we transfer the 401k portion into the 401k account, instead of them going into the 401k account directly?

ANSWER: The rent payments for the solo 401k owned property have to flow directly to the solo 401k account NOT first to your personal account and then to the solo 401k. The funds not flowing to the solo 401k account directly can result in a taxable distribution as well as a prohibited transaction.

What’s the maximum Solo 401k contribution while having a Defined Benefit Plan? 

If you are self-employed your self-employed business can sponsor both a defined benefit plan (DBP) and a defined contribution solo 401k plan. This will allow you to maximize annual plan contributions. Contributions to a defined benefit plan (DBP) are always treated as employer contributions;therefore, your employee contributions to the solo 401k are not impacted by your contributions […]

Can Roth Solo 401k Contributions be Distributed Tax Free?

Once the you have had the Roth solo 401k for 5 years and are age 59 1/2 or oler, you can take tax free distributions of both the contributions and the earnings that have accumulated in the Roth Solo 401k.   The 5 year clock on the Roth solo 401k starts when funds were first […]

Convert Pretax Former Employer 401k to a Roth 401k First or Convert it to a Roth Solo 401k Instead?

QUESTION: My understanding is that it is not permitted to transfer a Roth IRA into a Roth Solo401(k).    Recognizing this, I was planning on transferring the Roth 401(k) that I have from a previous employer to my new Roth Solo401(k) once I’ve set it up. My question is related to options for directing funds from […]

Can I transfer funds held in a Traditional IRA into the After Tax Solo 401k account?

No, traditional IRA funds, whether pre tax or non-deductible IRA funds are not allowed to be transferred to the voluntary after-tax solo 401k as the IRA rules do not allow for it.  However, a traditional IRA solely consisting of pretax IRA funds may be converted to the Roth Solo 401k which would entail working with […]

Am I able to transfer ownership of my house to the solo 401k trust? 

No, the IRS rules do not allow for the transfer, sale or the exchange of property including real estate that you personally own to the solo 401k trust. Such a transaction would result in a prohibited transaction. To learn more about the prohibited transaction rules, see the following:

Estimating When No Longer Self-Employed

QUESTION:  what happens if in 2024 I don’t have any consulting income?  Do I close the solo 401k then? ANSWER: Once you permanently cease self-employment activity, the solo 401k plan will need to be closed and transferred to an IRA or to another employer plan (e.g., your day-time employer’s 401k plan).Generally, once you know when you will […]

In-Kind Distribution of Self-Directed Solo 401k Owned Private Investment

QUESTION: I got a withdrawal question.  I just turned 59-1/2 and eligible to withdraw, I have made a private investment of 250K as a 1% share in an LLC under SOLO401K.  Is there a way I can transfer it to my regular LLC and show it as a this year’s withdrawal from 401K?  ANSWER: Yes, […]


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