QUESTION:
If I currently have investment properties, can I set up a solo 401k, then purchase my investment properties from
myself?
ANSWER: No because you as the solo 401k
owner fall under the disqualified person
category. Reason being, the regulations strictly prohibit the shifting, sale or
exchange of a personal asset including real estate to a solo 401k or vice
versa. Following is the specific section of IRC 4975, the section of the code
that covers prohibited transactions, covering this specific scenario.
IRC Specific Code Section
“The sale, exchange, or lease of property
between the plan (e.g., solo 401k plan) and a disqualified person.”
Regards,
Tricia in
North Carolina
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