- 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.
Mark Nolan has been active in the 401k and IRA industry for over 18 years. Working as a 401k administrator at Nationwide Insurance Company; then working as a Compliance Officer and Manager at self-directed IRA/401k custodian companies such as Trust Administration Services Corporation (now owned by Equity Trust Company), to IRA Services Trust company. Mark is currently the Compliance Manager at MySolo401k.Net.