Tax rates regarding my Solo 401k investments

September 7, 2016 | By Mark Nolan

QUESTION:

I have a question in regards to tax rates regarding my Solo 401k investments.

Once I retire and I have full access to withdrawal from my solo 401K, how will rental income from my investment properties be taxed? Will these be taxed at income tax rates or will these be taxed as passive or portfolio income?

ANSWER:

Distributions from retirement plans including solo 401(k) plans are taxed at earned income tax rates not capital gain tax rates. Solo 401k funds grow on a tax-defer basis until you start making distributions in which case federal and state taxes will apply.

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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