Who is the Custodian of My Solo 401k?

QUESTION: Who is the custodian for my Solo 401k now? Does your company serve as the custodian of my Solo 401k?

ANSWER: No we do not serve as the custodian of your Solo 401k but rather as the Solo 401k provider. The custodian of your Solo 401k depends on whether the funds are liquid or invested in alternative investments such as real estate and tax liens, for example. If the funds are liquid, the bank that you opened the Solo 401k bank account at is the custodian of the non invested funds. On the other hand, if the Solo 401k funds are invested in real estate, you are the custodian of the real estate documents, such as the recorded deed. As the trustee of the Solo 401k, you are responsible for safekeeping the real estate assets of the Solo 401k.

QUESTION: Lastly, do I have to have an appraisal on property when I buy it with my Solo 401k plan to satisfy the IRS?

ANSWER: No you do not need to have a property appraised before the Solo 401k purchases it. However, I would be inclined to do so to ensure the Solo 401k plan is not overpaying for the real estate investment.  Put simply, it only makes sense to get an appraisal anytime one invests in real estate, whether personal, Self-Directed IRA LLC or Solo 401k funds are used.

Thanks, OL

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 >>

  • About MySolo401k

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