QUESTION 1: I would like to use the loan proceeds for a principal residence purchase. What loan term would be applicable? What documentation is needed?
ANSWER:
When the Solo 401k loan proceeds are
used towards the purchase of a primary residence for the Solo 401k owner/trustee,
the loan may be paid over 15 years from date of origination. The Solo 401k loan must be documented using a
loan payment schedule and a Solo 401k loan agreement. Clients who open a Solo 401k with us are provided with the required Solo 401k
loan documents.
QUESTION
2: When signing up for your service,
is there a requirement to maintain your annual support for a number of
years?
ANSWER:
If you choose to use our company as your Solo 401k plan provider, we are responsible for the Solo 401k plan document,
that is, we are required to keep the plan document up to date. In other words, the draft of a Solo 401k plan
document is not just a one shot deal. As
such, you would either need to find a new Solo 401k provider whose plan document allows for Solo 401k loan or close the
plan, with the latter resulting in either rolling the Solo 401k funds to an IRA
or taking a distribution, thus subjecting the outstanding Solo 401k loan amount
to payment of federal taxes.
Thanks,
MT
No comments:
Post a Comment