Can I buy real estate in 401k trust

QUESTION: Can I buy real estate in 401k trust?

ANSWER:  Yes a 401k can buy/invest in real estate since real estate is not listed as a disallowed investment under IRC 408m. Further, the prohibited transaction rules outlined in the Internal Revenue Code (IRC) must be adhered when investing a 401k in any asset including real estate. Lastly, the 401k plan document must allow for real estate investing and the 401k sponsor (the employer that adopted the 401k plan) must agree to allow real estate as an investment option. For this reason, most full-time employer 401k plans do not provide for real estate as an investment option.

However, those business owners who are self-employed with no full-time employees often open a self-directed 401k (also known as a solo 401k or Individual 401k) and include real estate as a 401k trust investment option.

About Mark Nolan

Each day I speak with energetic entrepreneurs looking to take the plunge into a new venture and small business owners eager to take control of their retirement savings. I am passionate about helping others find their financial independence. Having worked for over 20 years with some of the top retirement account custodian and insurance companies I have a deep and extensive knowledge of the complexities of self-directed 401ks and IRAs as well as retirement plan regulations. Learn more about Mark Nolan and My Solo 401k Financial >>


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