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Can't Sell House to Solo 401k

1/7/2020

QUESTION:I am thinking of moving out of my home & possibly relocating to Texas. With that, I am thinking of converting my Ohio home into a 'Senior Living' home which I would rent to multiple senior citizens as a multi-unit home (note: none of prohibited persons will reside in it anymore).

Can I transfer the home to my Solo 401K Trust with no monies exchanging hands?
Questions:

Is this allowed?
A title transfer will need to happen?
Can the trust begin making the mortgage payments?
Will the loan need to be turned into a 'no-recourse' loan ?
What other factors play in ?

ANSWER: In short: no.
You can't transfer, sell or in any way move your house into your solo 401k as this would constitute a prohibited transaction. Please note that you can't sell the house to someone else who in turn sells it to your Solo 401k.
Learn more here: https://www.mysolo401k.net/solo-401k/prohibited-transactions-solo-401k/

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Investing Solo 401k via Single Member LLC & Pooling Funds to Invest

1/7/2020

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You can invest your Solo 401k funds via a new single member LLC.
Please see the following link for more information: https://www.mysolo401k.net/the-process-of-investing-a-solo-401k-plan-in-a-single-member-llc/
Your solo 401k provider can usually to set up an LLC for your Solo 401k. See the following: https://www.mysolo401k.net/open-ira-llc-account/
You can pool funds from each of your respective accounts to invest in certain investment such as real estate:
- Yes you each would have separate sub accounts for your respective funds (one in the name of the plan for your benefit and a second in the name of the plan for the benefit of your spouse with each account opened under the EIN for the Solo 401k).
- I understand that you are seeking to buy real estate from an unrelated person with both of your funds in the solo 401(k).
- In this case, the funds to purchase the property will flow from each of the respective sub accounts (i.e. you each write a check or wire funds to the title or escrow company).
- Please note that for administrative ease it would be acceptable for the rental income and real estate expenses to flow in and out of one of your Solo 401k accounts provided that there is reconciliation to allocate income and expenses between your accounts in accordance with each of your respective investments in the real estate (e.g. if 2/3 of the funds to purchase the property came from one account then this same account would be entitled to and responsible for two thirds of the income and expenses).
- It is a good practice to perform this reconciliation at least annually provided that the reconciliation is done prior to any distributions or transfers out of either of your respective accounts.

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Can't Sell House to Solo 401k

Investing Solo 401k via Single Member LLC & Pooling Funds to Invest

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