Who is Disqualified From Making Transactions With Your Solo 401k

Solo 401k | Disqualified Persons | Solo 401k Disqualified Parties

You can loan money from your Solo 401k to certain relatives and make Solo 401k investments that include relatives.

For example, Internal Revenue Code Section 4975, paragraph (c) (1) details that you cannot make qualified plan (e.g., Solo 401k) or IRA transactions with your "spouse, ancestors, lineal descendants, and spouses of lieneal descendants." It goes on to detail that this rule also applies to anyone involved in the administration of the plan--for example, your investment advisor, CPA, Attorney, Solo 401k provider, etc.

You cannot make any Solo 401k investments with:

1. your husband or wife;
2. anyone in the bloodline directly above or below you, such as:

• your natural parents
• your natural grandparents
• your natural children and their spouses 

Further, you can't proceed in making Solo 401k investments with your adoptive children. Lastly, as explained above, you cannot make Solo 401k investments with anyone providing services to your Solo 401k Plan as well as their spouse or blood relatives.

However, you can make Solo 401k investments with:

1. your brothers and sisters
2. your spouse's brothers and sisters
3. your spouses parents
4. your spouse's grandparents
5. your grandparent's spouse (if not your natural grandparent)
6. your stepchildren
7. your spouse's stepchildren
8. your aunts and uncles
9. your cousins