While the Roth IRA rules do not allow for the transfer to a qualified plan including a self-directed solo 401k plan, this same rule does not apply to pretax funds held in a traditional IRA or a SEP IRA. As a result, it is no uncommon to fund a solo 401k plan by transferring / rolling over Traditional IRA or SEP IRA funds from accounts held at Merrill Lynch.
The following information will be helpful when working with your solo 401k provider to process the non-taxable IRA direct-rollover.
NOTE: If you use My Solo 401k Financial as your solo 401k plan provider, they will fill out the Merrill Lynch IRA transfer-out form for you.
Use the Merrill Lynch One Time Distribution Form
How to Complete the Merrill Lynch Transfer Form
Part 1: Account Owner Information: Verify your IRA account number, name, and enter your DOB.
Part 2: Reason for Withdrawal: Check off to request a direct rollover to an eligible retirement plan, as a solo 401k plan is a retirement plan.
Part 3: Amount of Distribution: Check off the applicable box for the full or partial transfer of the account.
Part 4: Withholding Election: We already checked off the Check off ” Do Not withhold federal income tax, since the IRA is being transferred to a 401k plan and taxes do not apply.
Part 5: Distribution Instructions: Check off Direct Rollover and check off Mail check to the mailing address on file. he direct-rollover check will be made payable in the name of the solo 401k and mailed to you directly for deposit into the solo 401k brokerage account. NOTE: Please verify your address.
Part 6: DOES NOT APPLY Since this is not a Taxable Distribution
Part 7: Direct Rollover to Third-Party…: Check off Make check payable to. for plan name, enter the name of the solo 401k plan. For FBO, enter your name. Enter your mailing address. Check off 401k under Plan Account Type. The direct-rollover check will be made payable in the name of the solo 401k which further confirms this is a non-taxable event.
Part 7: Signature: Please sign and date. NOTE: You need to sign with a black or blue pen (handwritten signature), as Merrill Lynch will not accept electronic signatures.
Submitting the Signed Transfer Form to Merrill Lynch for Processing
- Per the transfer form (see the top of the form), the signed transfer form can be submitted to Millennium Trust by mail or by fax: