QUESTION: Can I change the name, title of my solo 401K?

ANSWER: Yes you can change the name, title of the solo 401k. Of course the following would be required:

The solo 401k provider would need to update the Solo 401k documents, a letter would need to be submitted to the IRS confirming the name change, the solo 401k bank account and investments documents (e.g., deeds, notes, etc.) would need to be updated to the new solo 401k name.

QUESTION: When I use my solo 401k money to purchase real estate, how exactly
does the real estate need to be titled?

 Please follow following procedure when investing your solo 401k in real estate.

ANSWER: Basically, the name of you solo 401k must appear on the purchase documents including the deed. Commonly the name of the solo 401k appears and then the solo 401k owner's name or the other way around. Both are acceptable.

You may also use the real estate purchase form located on our forms tab of our website to further document the solo 401k real estate purchase.

Solo 401k Real Estate Purchase Procedure:
http://www.mysolo401k.net/SelfDirected401k.html

Solo 401k Real Estate Purchase Form:
http://www.mysolo401k.net/Free-Solo-401k-Investment-Forms.html

If you are eligible to receive a distribution from your 401(k), 403(b), TSP or 457(b) retirement plan, you have option to directly rollover eligible rollover distributions from these plans to a Roth IRA (e.g., self-directed IRA LLC), or to a designated Roth account (e.g., self-directed Roth 401k) provided you are self-employed and your self-directed 401k plan allows for rollovers to designated Roth accounts.

Before you decide which type of account to choose, you should understand the differences.

Differences between Roth IRA and designated Roth Accounts

When you turn 70 ½ you will be required to take required minimum distributions from designated Roth accounts (e.g., self-directed 401k), nut not from Roth IRAs.

The rules do not permit the transfer of Roth IRAs to a Roth designated account like a self-directed Roth 401k; however, Roth designated accounts (e.g., Roth 401k) may be transferred to a Roth IRA. This method is commonly utilized to escape the RMD requirement. Therefore, make sure to transfer the Roth designated account to the Roth IRA before you reach age 70 ½ in order to avoid the required minimum distribution requirement.

Distribution Rules

Withdrawals from a Roth IRA or a designated Roth account, including earnings, will be tax-free if you:

Have held the account for at least 5 years, and

Are:

Age 59 ½ or older;

Disabled; or

Deceased.

In addition, you can get tax-free distribution after 5 years from a Roth IRA of up to $10,000 to buy your first home.

QUESTION: I wanted to open a solo 401k, and would roll an old company 401K to the solo 40k.  However, one potential hurdle is that I have an outstanding loan on my old company 401K plan.  Am I required to pay that back prior to rolling the balance to a solo 401k?  Or can the loan be rolled as well?  Is that a question for my company plan administrator, or is it a matter of IRS regulations?

 Thanks for your help,

John B.

ANSWER: While the IRS 401k rules permit the transfer of outstanding 401k participant loans to a 401k including a solo 401k, it is ultimately up to the employer sponsoring the 401k plan as to whether or not the outstanding 401k loan can be transferred. Keep in mind that if the loan is not in a default there is a higher chance that they will allow you to transfer out the 401k to loan to another 401k. It has been my experience that most employers will require the participant to pay off the outstanding loan before processing the outgoing direct rollover or transfer to a solo 401k or it will be treated as a distribution by reporting it on form 1099R under a code 7 or 1 depending on the participant’s age.