How do I handle income and expenses for Roth Solo 401k Real Estate Investments?

Please check out this good question from our Daily Live Zoom call. Subscribe to our YouTube Channel to get notifications of our Daily Solo 401k FAQs.

If I am buying a rental, the contract is in the name of the plan but would the check come from my Roth sub-account and when rent comes in or sale proceeds come in would the check be made to the Roth sub-account?

Response:

In short: Yes

Our Solo 401k plan allows you to invest Roth Solo 401k funds in real estate. In that case, the income (including Rent and Sale Proceeds) and expenses would flow in and out of the Roth Solo 401k sub-account.

When one makes an investment of Roth Solo 401k funds, the proceeds, dividends, etc. of such investment must flow back to the Roth Solo 401k sub-account.  For example, one can’t make an investment of pretax Solo 401k funds and then have the proceeds flow back to the Roth Solo 401k sub-account (or vice versa). 

About George Blower

I have the privilege of educating our clients about our products and services so that they can make informed and confident decisions about their financial future. Prior to joining My Solo 401k Financial, I served as the general counsel for a subsidiary of a Fortune 500 financial services company. Learn more about George Blower and My Solo 401k Financial >>

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