QUESTION 1. Is the form 5500 due 4/15 or Oct if extension for filing tax return is filed?
ANSWER: As provided in IRS Publication 560, the annual solo 401k contribution is due by the tax return due date plus extensions provided an extension return was timely filed.
QUESTION 2. I have invested the funds in (paid in full) real estate residential rentals. Since they were purchased in Nov – Dec 2012, do I use the purchase prices as the value for form 5500, or must I obtain an independent valuation?
ANSWER: First, Form 5500 EZ is only filed if the total value of your solo 401k hit $250,000 or above as of 12/31, if not, then a Form 5500EZ does not need to be filed. Form 5500 EZ for the solo 401k if due/must be filed with the IRS by the end of July. Second, because the real estate was purchased in December, I would imagine that the value did not change in less than 30 days. Therefore, an appraisal may be a waste of money.
QUESTION 3. Can I make cash purchases for repair items, and use those purchase amounts as a contribution, or must all expenses be paid via check or debit card on 401k bank account?
ANSWER: Absolutely no you cannot make cash purchases for repairs and treat them as solo 401k contributions. Instead, provided you have self-employment income from the business for which the solo 401k was established, you first have to make a cash solo 401k contribution. Subsequently, the solo 401k funds would be used to cover expenses associated with the real estate asset.
QUESTION 4. Please confirm that I can do minor work on the premises, providing I do not get paid for the work.
ANSWER: No you cannot do any repairs, whether minor or major, paid or non paid on the solo 401k real estate investment as you are a disqualified party. Doing so would result in a solo 401k prohibited transaction.
QUESTION 5. What is a good publication for rules regarding a Solo 401k plan?
ANSWER: The following contain rules applicable to 401k plans including solo 401k.
Click on IRS Pub 560
Click on IRC 4975:
QUESTION 6. When is the cutoff date for contributing to the Solo 401k? Can the contributions be made in a lump sum prior to the cutoff date, or is there a requirement for periodic contributions?
ANSWER: See answer above to question 1 for solo 401k contribution due date. Yes annual contributions to a solo 401k can be made periodically or annually.
Thanks very much
LK form Florida