Suppose you have an investment asses (building for instance) that you want and could purchase to your solo Roth 401k account. however you do not have enough funds in solo roth 401k. but you do have a large (tax deferred) solo 401k.
QUESTION:Can can solo roth 401k (trust) borrow from Solo 401k (trust) to acquire the asset?
if there is an arrangement under which it is possible that the return on the asset will go to solo roth 401k and be tax free. Would dealing between two "independent" trusts with the same beneficiary be considered a prohibited transaction?
ANSWER: The IRS Solo 401k rules do not permit 401k to 401k loans. Instead, you would need to convert your existing Solo 401k to a Roth Solo 401k and pay the taxes on the amount converted. If you would like to proceed with Roth Solo 401k conversion let me know, as certain steps have to be followed in order to be in compliance wit the IRS regulations.
Please read following link regarding Roth Solo 401k regardig Roth Solo 401k rules: