How to Transfer IRA LLC to Solo 401k

 

Now that you have finally discovered that the Self-Directed Solo 401k (a/k/a Solo 401k, Individual 401k, Single K, Solo k, etc.)  is hands down better than the LLC IRA –also known as Self-Directed IRA LLC or IRA LLC, after you open Solo 401k the next step is to transfer/direct rollover the LLC IRA to Solo 401k.

Steps for Processing Transfer/Direct Rollover of IRA LLC to Solo 401k

The process of transferring your LLC IRA to your newly established Solo 401k checkbook control plan is relatively straight forward as long as you follow these steps:

Step 1: Make sure to open Solo 401k with a Solo 401k provider that allows for checkbook control Solo 401k.

Step 1: After you open Solo 401k, have the Solo 401k provider prepare IRA Direct Rollover/Transfer form and list the name of the IRA LLC to be transferred under the list of assets to be transferred section of the form.

Step 3: The custodian of the LLC IRA, whether Equity Trust, Pensco Trust, Entrust, Provident Trust, Sun West Trust, Sterling Trust (now part of Equity Trust), etc., will need to process and report the transfer/direct rollover of the IRA to the new Solo 401k by issuing Form 1099-R and using code “G” in box 7 of Form 1099-R. As such, in addition to submitting the IRA Direct Rollover/Trasfer Form, you will need to submit a final valuation for the LLC IRA to the IRA custodian.

Step 4:  After the IRA custodian receives the executed IRA Direct Rollover/Transfer Form, and IRA LLC Valuation/Appraisal, the IRA custodian will then assign the LLC IRA to the Solo 401k by preparing written assignment in the name of the Solo 401k.

Step 5: Once you, as the named trustee of the Solo 401k, receive the IRA LLC to Solo 401k assignment form from the IRA custodian, you will need to dissolve the IRA LLC by assigning the LLC assets, whether real estate, promissory notes, tax liens, precious metals, etc., to the Solo 401k. The assignment of the IRA LLC assets will need to be documented in writing. For example if real estate is currently held in the IRA LLC, you will need to prepare grant deed to document the assignment of the property from the IRA LLC to the Solo 401k.

Step 6: Deposit the liquid funds from the IRA LLC bank account to the newly established Solo 401k bank account.  Finally, dissolve the IRA LLC by filing Article of Dissolution with the state where the LLC was registered.