BACKGROUND & QUESTION:
Our solo 401K just foreclosed on a note and
today got back the (fixer upper) property at the Trustee’s Sale, as no
3rd party bidders made a bid at today’s auction.
Can we legally sell this new REO property (owned by the solo 401k) to
ourselves for a penny over the minimum bid amount we set
in today’s auction?
ANSWERS:
Since the solo 401k invested in the promissory note (i.e., it was the lender/beneficiary) secured by real estate, in the event of default the property would be deeded to the solo 401k plan, resulting in the solo 401k now owning the property,
It would be prohibited for you to buy property owned by your solo 401k plan which would result in a prohibited transaction.
