QUESTION:
Do you know if a solo 401k can invest in equipment leases?
ANSWER:
Yes a solo 401k can invest in equipment leasing. Here is a brief summary of how it works.
The solo 401k is the owner and lender of the equipment. The solo 401k would then lease the equipment to the third-party. Once the lease is up the solo 401k sells the equipment to the lessee or keeps leasing the equipment to the same business or a different business.
The paperwork in connection with the equipment lease would list the solo 401k as the lessor. For example, if the name of John’s Solo 401K is Core Solo 401k Trust, the lessor would read as John Doe, Trustee of Core Solo 401k Trust.
The lease payments would flow back to the solo 401k bank account and so would the proceeds from the sale of the equipment if the solo 401k owner decided to sell the equipment.
