The conversion of pretax solo 401k funds to a Roth solo 401k results in income taxes due on the converted amount. In exchange, the money in the Roth solo 401k grows tax free, and the Roth solo 401k owner and her heirs can also take tax free distributions once distribution triggering events are satisfied.
A possible way to mitigate the tax hit on the Roth solo 401k conversion is to spread the in-plan conversion over a few years (i.e., convert small amounts each year). If the right amount is converted, it may also prevent the income from conversion tipping you into a higher tax bracket.
Another way to help stem the resulting tax hit from the conversion of pretax solo 401k funds to a Roth solo 4o1k is to consider a donor-advised fund, or DAF. DAFs are programs offered by public charities and allow charitable contributions to be made in a given year; however, the donor (the solo 401k participant) can make a tax deduction for that year. Then, at any time, grants can be recommended from the DAF to the charities the donor wants to support. A tax deduction taken in the year of the Roth solo 401k conversion can help offset the in-plan solo 401k conversion taxes.