QUESTION 1: How much profit I need from my business to allow setup the Solo 401K? Is there minimal limit?
ANSWER: Neither the internal revenue code
nor IRS Publication 560 specifically list a set figure of earned income
from self-employment for qualifying for a solo 401k. You will ultimately need
to consult with your personal tax professional to determine if you are truly
self-employed and that you will continue to be self-employed, as qualifying for
a solo 401k is not just a one-shot deal. In other words, you will need to
continue to be self-employed, whether part-time or full-time in order to
continue to participate in a solo 401k.
QUESTION 2: Can I buy house use half solo 401k plan money and half
cash from my own pocket?
ANSWER: If you are going to use the solo 401k owned real-estate property for your personal use the answer is no
because you are a disqualified party and therefore are prohibited from living in
the house because it would be partially owned by the solo 401k. What you are describing
mirrors a tenants-in-common transaction. Please visit following links to learn
more:
QUESTION 3: If answer question 2 is yes, can tenant pay rent to my bank
account and I move the money to Solo401K account, or tenant need to split the
rent to 50/50 to deposit to different account?
ANSWER: No the gains on a solo 401k
assets including real estate may not be deposited into the solo 401k owner’s
personal bank account and then re-deposited into the solo 401k bank account.
Thanks,
Yaning in Columbus Ohio
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