QUESTION: What is the longest term I can take a solo 401k loan for my primary residence? I plan on buying a home to retire in the next 10 years and was hoping to rent it out until that time so I can take advantage of the low interest rates currently offered. Below says 5 years with the exception of "primary residence" which is what it would be when I retire. I guess the other part of this question is how long can I wait before this would not be a primary residence?
Richard in Kentucky
ANSWER: Unless you will be using the home from day one as your primary residence, the solo 401k loan payback period will be 5 years. In other words, if your plan is to use the home as a vacation home now or in 10 years instead of your primary residence from day one, you cannot extend the solo 401k loan to the 15 year period. Note that the first item the IRS agent will audit for in the event of an audit is for compliance with the solo 401k participant loan rules.