QUESTION:
I own and am the only employee of my Inc. sef-employed business and we have the self-directed solo 401k plan this business.
If I wanted to sell the self-employed business to someone or another company…………. would I or should I first terminate the solo 401k plan and roll it into another qualified retirement plan of my own? I would not want the new owner having control over this plan or my assets. Or would you advise to do something else?
I also have been contributing to a 401k plan from another company that I am an employee at that I contribute under employee contributions.
Maybe I could roll the assets from my self-directed solo 401k plan into my 401k account at my day job employer ?
ANSWER:
You would need to transfer the solo 401k to an IRA or your other employer’s 401k plan or if you will be self-employed under a new business, we would need to update the solo 401k plan to list the new self-employed business. It would be best to accomplish this prior to selling the business. Depending on how you would proceed, applicable reporting to close the plan with the IRS would apply–for example, if you transfer the solo 401k to an IRA or to your day job employer’s plan, both a Form 1099-R and a final Form 5500-ez would need to be issued formally close the solo 401k plan with the IRS.
