When a solo 401k invests in an entity such as real estate syndication LLC or LLP, for example, the following rules need to be considered:
- If the solo 401k owner/participant is a manager or general partner of the LLC or LLP, such investment by his or her solo 401k will run afoul with the prohibited transaction rules.
- If the solo 401k owner/participant is not a manager or general partner such investment is not prohibited provided he or she in combination with personal funds, solo 401k funds and family members such as his or her parents, spouse, children, etc., does not own a 50% or more interest in the LLC or LLP, and is not an employee of the syndicate.
See also the following: https://www.mysolo401k.net/solo-401k/private-company-investment/
