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QUESTION: When I sell Solo 401k real estate property, will I use my EIN for the Solo 401k for reporting rather than my social security number?
When conducting Solo 401k transactions, the EIN for the Solo 401k must be used which helps ensure that any reporting is done properly under the EIN of the Solo 401k.
Please note that in the establishment process, we will obtain an EIN number for the plant so that lets the IRS know that any reporting that’s done with respect to the EIN number is done with respect to the Solo 401(k) plan.
So for example if there gains are in the Solo 401k, this is being reported with respect to that EIN and the IRS will understand that this income is is growing on a tax-deferred basis inside of 401(k).
In contrast, if the tax reporting were done under Social Security number or the self-employed business EIN number (e.g. an interest-bearing bank account for your Solo 401(k) and the bank will report the interest earned using a 1099-INT to the IRS), the IRS would expect that interest income to be reported under business tax return, but if it’s reported under the EIN for the Solo 401k plan, the IRS will understand that the income is growing inside of 401(k) on a tax-deferred basis.