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Self-directed 401k Question: Can you provide the right details to put under IRS EIN form and creating an LLC for my solo 401(k) for real estate investments?
First, it is important to note that with our Solo 401k plan the Solo 401k owner may certainly invest solo 401k funds in real estate via an LLC owned by their Solo 401k. At the same time, it is not required and with our Solo 401k plan the solo 401k will have checkbook control and be able to invest in real estate without the need for an LLC.
With our Solo 401k plan, the Solo 401k will a bank account or brokerage account with a checkbook feature and then the Solo 401k owner as the trustee will have direct checkbook control to make those investments directly in the name of the Solo 401k.
Some clients do wish to hold their Solo 401k investments in an LLC (e.g. for limited liability purposes in order to protect certain Solo 401k investments, such as a brokerage account, from liability that might arise from other Solo 401k investments such as real estate).
This is acceptable provided that the Solo 401k invests in a new LLC that is 100% owned by the Solo 401k where the Solo 401k owner is the manager of the LLC.