Solo 401k for Patent Investment

Investing a solo 401k in patents does not appear to be a disallowed investment as referenced below; however, it is prohibited to invest your solo 401k in a patent that you (the solo 401k account holder/participant) is developing because you are considered a disqualified party. See below for more on disqualified parties.
However, if the solo 401k invests in a patent that is being developed by a third party (non-disqualified party), the IRS rules do not reference such investment as being disallowed or prohibited. VISIT HERE to learn more about the prohibited transaction rules.
While the IRS rules do not provide a list of approved 401k investments. The code does provide a list of disallowed investment which include the following:
  • collectibles, such as art, antiques, gems, coins, or
  • alcoholic beverages, and they can invest in certain precious metals only if they meet specific requirements. (IRC Section 408(m))
However, certain transactions between a plan including a solo 401k plan and a “disqualified person” are specifically prohibited by law. CLICK HERE to learn more about the prohibited transaction rules.

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About Mark Nolan

Each day I speak with energetic entrepreneurs looking to take the plunge into a new venture and small business owners eager to take control of their retirement savings. I am passionate about helping others find their financial independence. Having worked for over 20 years with some of the top retirement account custodian and insurance companies I have a deep and extensive knowledge of the complexities of self-directed 401ks and IRAs as well as retirement plan regulations. Learn more about Mark Nolan and My Solo 401k Financial >>

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