Solo 401k

In memorandum 201935011 the IRS provides general legal advice on the determination of whether a contribution by an employer to the employer’s qualified retirement plan (note that a solo 401k plan falls under the qualified plan umbrella and allows for employer contributions) has actually been paid to the plan’s trust such that the contribution is deductible […]

Often called DC plans, DC stands for “defined contribution” plan. The Most Popular Types of Defined Contributions Plans The most popular DC plans allow for both employee and employer contributions.  The most popular types of DC plans are 401k plans (note that a solo 401k falls under the defined contribution type too but it is […]

The Bureau of Labor Statistics released a report this September stating 77 percent of private industry workers who had access to employer-provided retirement benefits chose to participate in those benefits. This measure is known as the take-up rate. Retirement benefits include defined benefit and defined contribution plans, with solo 401k pans falling under the defined […]

The SEC Best Interest Rule which is scheduled to take effect on June 30, 2020 is under challenge by seven states (New York, California, Connecticut, Delaware, Maine, New Mexico and Oregon) and the District of Columbia.  On September 9, 2018, these states filed a lawsuit in the U.S. District Court for the Southern District of […]

The 401(k) regulations allow for contributions to multiple 401(k) plans. This is especially advantageous for those who have a full-time job and participate in that employer’s 401(k), and those who also have a self-employed business and participate in that self-employed business solo 401(k). A solo 401(k) is made up of employee and employer contributions. The employee […]

QUESTION: I am thinking about doing an in plan Roth 401k conversion of the remaining funds in the pre-tax part of my solo 401k plan (around $300K). I am with my tax advisor now and we are questioning if this could be recharacterized (undone) later in 2019 when my tax situation becomes clearer. ANSWER: That is a […]

QUESTION: My intent is to co-invest with my 401k in newly formed LLC, to be capitalized 24% by 401k and 76% by me. This is to enable funding of land and the design and build of building for purposes of lease to third parties and income generation. Can you explain any particular requirements for such […]

A self-directed solo 401k may own/invest in physical real estate (e.g., family homes, apartments, condominiums, commercial buildings and land), provided the 401k investment and prohibited transaction rules are satisfied. The 401k real estate investment rules are, for the most part, straight forward and pretty easy to follow. Following is a list of some of the 401k real […]

While solo 401k distributions are not mandatory until the solo 401k owner reaches age 70 1/2 (the technical IRS lingo is Required Minimum Distributions), it is not well known that solo 401k distributions can also be made in the form of a hard asset (for example,  real-estate) instead of cash.  In other words, instead of receiving […]

QUESTION: I’m closing down my self-employed business and then my solo 401k. What are the next steps for this? If I wanted to take a full distribution and not set up an IRA LLC, how would that work and what would be my tax obligations? I have money in the solo 401k account at the bank as […]