Transfer or deposit tax lien real property to a solo 401k trust

QUESTION: 3 years ago, just before we founded the Solo 401K trust account, I purchased some Tax liens with after tax money (not SEP or IRA).

Now, I have the opportunity to apply for three property deeds, at a fee of course.  Can I pay these fees and put the properties in my Solo Trust’s name, using my Solo 401k Trust’s money?

ANSWER: Good question, but unfortunately because the tax liens were not owned by the solo 401k trust, the underlying real estate properties cannot be deposited/transferred to your solo 401k trust, as this would be a prohibited transaction. What is more, you could not transfer the tax liens to the solo 401k trust either because you already own them personally.

This type of transaction would fall under the following prohibited transaction rule:

“The sale, exchange, or lease of property between a solo 401k plan and a disqualified person.”

Click here to learn more about the prohibited transaction rules.


Tom G. in Brooklyn NY

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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