Solo 401k Disqualified Person

​A disqualified person with respect to Solo 401k is any of the following as defined by IRC Code 4975:

(1) a fiduciary of the plan ( e.g., Solo 401k plan);

(2) a person providing services to the Solo 401k plan;

(3) an employer, any of whose employees are covered by the Solo 401k plan;

(4) an employee organization, any of whose members are covered by the Solo 401k plan;

(5) any direct or indirect owner of 50% or more of any of the following:

  • the combined voting power of all classes of stock entitled to vote, or the total value of shares of all classes of stock of a corporation that is an employer or employee organization described in (3) or (4);
  • the capital interest or profits interest of a partnership that is an employer or employee organization described in (3) or (4); or
  • the beneficial interest of a trust or unincorporated enterprise that is an employer or an employee organization described in (3) or (4)

(6) a member of the family, of any individual described in (1), (2), (3), or (4) (i.e., the individual’s spouse, ancestor, lineal descendant, or any spouse of a lineal descendant);

(7) a corporation, partnership, trust, or estate of which (or in which) any direct or indirect owner described in (1) through (5) holds 50% or more of any of the following: the combined voting power of all classes of stock entitled to vote or the total value of shares of all classes of stock of a corporation;

  • the capital interest or profits interest of a partnership; or
  • the beneficial interest of a trust or estate

(8) an officer, director (or an individual having powers or responsibilities similar to those of officers or directors), a 10% or more shareholder, or highly compensated employee (earning 10% or more of the yearly wages of an employer) of a person described in (3), (4), (5), or (7); or

(9) a 10% or more (in capital or profits) partner or joint venture of a person described in (3), (4), (5), or (7); or

(10) any disqualified person, as described in (1) through (9) above, who is a disqualified person with respect to any plan to which  a multiemployer  plan trust is permitted to make payments under section 4223 of ERISA.

Additional Information

Solo 401k Fiduciary Defined

Solo 401k Prohibited Transactions Defined

Outcome of Engaging in Solo 401k PT

​Correcting a Solo 401k Prohibited Transaction

​Regulators of the Self-Directed Solo 401k Industry

Additional Information

Investment Fraud

Targets of Investment Fraud

Reasons Solo 401k Plans are Targets of Fraud

Techniques Used by Fraudsters

Tips for Avoiding Fraud

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