QUESTION: I understand I can
move money from a normal 401k – including my self-directed one – into a Roth ,
pay taxes on the monies transferred now, then use that Roth for traditional
investments. Is there a way to do the same but not be bound by common investing
(stocks, brokerage houses, etc) within that Solo 401k Roth? The investment I
have in mind is buying shares in a new company, but the shares are
unregistered, non-traded, non-public company shares, which I plan to do with my
Solo401k if I cannot find a way to do it within a Roth. (I have done this with
my Solo401k in another company for restricted stock shares but that company is
Exchange listed and their shares trade on the OTC, as my shares can after the
vesting period expires – so a different situation.)
ANSWER: Yes just like Roth 401k funds can be invested in publicly
traded companies, the Roth solo 401k may also be invested in
private company shares. The following procedure sheds light on investing in
private shares. The same procedure
applies to investing a pretax solo 401k in private company shares.
Thanks,
Linda in Minnesota
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