Use Solo 401k For Coffee Farm Investment

Can I invest my self-directed solo 401k in  a coffee farm investment in Panama?

While the solo 401k rules do allow for investing in alternative investments such as farm that produces crops, the following items should be considered.

The investment  by the solo 401k plan will be passive, and the solo 401k participant/trustee does not  hold any position in the company such as an officer, board member, employee, etc. The investment would be held in the name of the Solo 401k plan using the plan’s EIN and all income and expenses would be deposited and paid by the Solo 401k.
Please note that: while a Solo 401k can invest in a private company, the investment could be subject to Unrelated Business Income Tax (UBIT) on pass-through income (e.g. if the Solo 401k owns an equity interest in an active business that provides goods and/or services and is taxed as a pass-through entity).  Ultimately, it will depend on the specific facts and circumstances such that it would be prudent for the client to determine this in consultation with his/her tax adviser.  (https://www.mysolo401k.net/solo-401k/private-company-investment/)

 

 

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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