- In simple terms crowd funding means that a large number of individuals making investment of relatively small amount of money.
- There are two questions to analyze
- the first question is CAN I invest in a crowd funded investment… The answer is yes provided that you are not on both sides of the transaction… For example you are not working or personally investing in the company that is seeking the crowd funded investment
- the second issue is HOW the crowd funded investment is structured
- if the crowdfunding investment is structured as equity (e.g. stock in a corporation, membership interest in an LLC, etc.) the investment may be subject to unrelated business income tax if (I) the entity is an active business (e.g. providing goods or services) and (ii) the entity is NOT taxed as a C Corporation. Note: If the underlying investment is merely a passive real estate investment (e.g. long term rental) rather than a business the UBIT issue should not apply.
- if the crowd funded investment is structured as debt there is no unrelated business income tax issue as long as it is TRUE debt (e.g. some debt can be converted to equity such as a convertible note)
- the final issue are the standard issues with any solo 401(k) investment
- must be in the name of the solo 401(k) e.g. the investment docs must be titled in the name of the solo 401(k)
- the funds must flow in and out of the solo 401(k) account e.g. to fund the investment the funds will flow from the solo 401(k) account & the return of the investment will flow back to the solo 401(k) account. For more information, click here.
SOLO 401(K)
INVESTMENT PROCEDURES
- Investment Guides
- Real Estate Investment Procedure
- Notes Investment Procedure
- Private Shares Investment Procedure
- Tax Liens Investment Procedure
- Gold Procedure
- Bitcoin/Cryptocurrency
- Coinbase Bitcoin Guide
- Gemini Crypto Guide
- Crowd Funding
- Solo 401k Investment Forms
- Rehab Bank Lenders
- Non-Recourse Loan
- Tenants-In-Common
COMPLIANCE, Contrib. & Dist.
- Form 5500 EZ FAQs
- Controlled Group
- Plan Asset Rules
- Solo 401k Distributions
- Solo 401k Distribution Triggers
- Hardship Distributions
- Solo 401k In-Kind Distribution
- Solo 401k RMD
- Beneficiary Distributions
- Solo 401k Deadlines
- Solo 401k Do's & Don'ts
- UBIT / UBTI
- Primer on Contributions
- Contribution Types
- 2022 Solo 401k Contributions
- 2023 Solo 401k Contributions
- 2022 Contrib. to IRA & Solo 401k
- 2023 Contrib. to IRA & Solo 401k
- Guides-Contribution and Mega Backdoor
- Recent Regulations
- Prohibited Transactions
- Primer on Prohibited Transactions
- Avoiding Investment Fraud
HOW TO & CHECKBOOK
- Calculate Contribution for Sole Proprietor
- Calculate Contribution for Partnership
- Calculate Contribution for Corporation
- Solo 401k Contribution Calculator
- Claim Solo 401k Contribution Deduction
- RMD Solo 401k Calculator
- Invest in Real Estate
- Real Estate FAQS
- Invest in Notes
- Notes FAQs
- Invest in Life Insurance
- Completing Form W-9
- Form 1040 - Reporting Rollovers to Solo 401k
- 1099-R Rollover Reporting Chart
- The 10% Early Distribution Penalty
- IRS Levy on Solo 401k
- Solo 401k Bankruptcy Protection
- Solo 401k Funding Methods
- Solo 401k Checkbook Control
- Checkbook Ameritrade Brokerage Account
- Checkbook Fidelity Brokerage Account
- Checkbook Schwab Brokerage Account
- Brokerage vs. Bank Account
- Mega Back Door ROTH Solo 401k
- Solo 401k Vs. Self-Directed IRA
- Compare: SEP, SIMPLE and SOLO
- The Dec. 31 Solo 401k Set up Deadline
- Top 7 Solo 401k Opening Tips
- Adding Spouse to the Plan
- Top Self-Directed 401k Investments
- Top Solo 401k Things to Know
- Recent Solo 401k Regulations
- Checklist-Solo 401k Eligibility
- 3 Years Pat-Time Employee Rule
- Am I self-employed?
SOLO 401K & ROLLOVERS
- Solo 401k Plan
- Late 60 Day Rollover
- SIMPLE IRA Rollover to Solo 401k
- SEP IRA Rollover to Solo 401k
- IRA Rollover/Direct Rollover to Solo 401k
- In-plan Roth Solo 401k Rollover
- Transfer Former Employer 401k to Solo 401k
- Transfer TSP to Solo 401k
- Transfer 403b to Solo 401k
- Transfer 457b to Solo 401k
- Still Working 401k Plan Transfer
- Roth IRA Transfer Restriction