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Self-Directed Solo 401k FAQ – Will I receive a Form K 1 for my Crypto Solo 401k investment?
QUESTION:
We bought some Bitcoin crypto but sold in solo401k. The accountant is looking for a K1 for this. Not sure how to get that since fidelity doesn’t provide any tax statements.
RESPONSE:
•If the solo 401k is invested directly in cryptocurrency (i.e., the crypto is directly owned by the solo 401k) then a Schedule K-1 is not issued to the solo 401k plan.
•On the other hand, if the solo 401k invested in a private company that pools investors’ funds including solo 401k funds, then the private fund would issue the Schedule K-1.
•Also, if a Schedule K-1 is issued by the private fund in which the solo 401k is invested in, the gains flow back to the solo 401k and generally grow on a tax-deferred basis.
