Do you have any resources that can help me figure out how my solo 401k can invest in copyrights? I'd like to purchase copyrights for books and receive royalties directly into my 401k. Who can help me figure this out?
We don't know of any IRS code information that specifically addresses investing in copyrights. Nor do we know of any professionals that do.
However, the IRS code does not list copyrights as a disallowed investment. See the following: https://www.irs.gov/retirement-plans/retirement-plan-investments-faqs
The following private investment procedure may be helpful when investing in such an investment.
Another item to keep in mind is that such investment may generate UBIT.
What is Unrelated Debt-Financed Income Tax?Similar to UBIT there is another tax called Unrelated Debt-Financed Income (UDFI) tax that ONLY applies to IRA investment income derived from debt-financed property, proportionate to the debt on the property. HOWEVER, UDFI does not apply to solo 401k plans so this is why individuals prefer solo 401k plans over IRAs for investing in real estate whereby a non-recourse loan (debt financing) is used.