QUESTION: Once I have a promissory note executed with business or person using my self-directed solo 401k funds, can I make a cash withdrawal or wire transfer to their account without it being considered an early withdrawal from my solo 401k trust?
ANSWER: When a retirement account such as a self-directed solo 401k invests in a promissory note, it is considered and investment not a distribution, provided the prohibited transaction rules are not violated. For example, it is prohibited for the solo 401k to loan funds to family members such as parents, a spouse and children.
I appreciated, Jay S. in Michigan
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