BACKGROUND: I am getting ready to make my first investment using my Solo 401K Trust. An LLC is being formed, their sole purpose it to provide investment capital to a land development company. After 12 months, the proceeds coming from the sale of the developed land by the land company will be paid to this LLC.
The anticipated profit to the LLC will be 20%. At that time, a member of that LLC can choose to keep their funds in the LLC for continued use by the land development company or return the funds to the investors.
QUESTION: Here is my question: The lawyer forming this investment LLC wants to know what name I want them to use for me as a member of this LLC. Should it be my name or should it be the name of my Trust, or me as the trustee of the Trust?
ANSWER: When a solo 401k trust invests in an LLC by purchasing member units, title/registration is taken in the following fashion:
Name of the trustee, trustee, name of the solo 401k plan
EXAMPLE: Larry Byrd, Trustee of XYC Solo 401k Trust
Thanks for your assistance,
Chuck in Virginia