How do I title my Solo 401k Investment in Private Equity/Private Placement?

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QUESTION: For a Solo 401k private equity investment, the fund manager is asking “Please let us know the exact name under which we should be titling each person’s participation.“

How do I respond?

A Solo 401k private equity investment needs to be made under the name and EIN of the solo 401k (e.g. “XYZ Trust” where you sign as Trustee of the Solo 401k).

The investment provider will likely require that you sign a subscription agreement or similar document.

The Solo 401k owner signs as the trustee of the solo 401k and under the EIN of the solo 401k.

As part of the Solo 401k establishment process, we will obtain an EIN number specifically for the 401(k) via the IRS system so that the IRS understands that the EIN is associated with the Solo 401k.

As a result, when the private equity investment provider is reporting the activity on that investment to the IRS (e.g. reporting of dividends or other return on that investment such as on a K-1 to all of the investors), the IRS will understand that the income reported is growing inside of a 401(k) on a tax-deferred basis.  

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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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