I would like to loan my son the Solo 401k funds to buy a house

QUESTION: I would like to loan my son the Solo 401k funds to buy a house, have him sign a promissory note at the prevailing market interest rate, and have him give the plan a secured interest in the real estate.  He would be paying a much higher interest rate than my Solo 401k retirement plan is currently making on the funds so it would really benefit both of us.  Is this possible?

ANSWER: That is a prohibited investment because your son is a disqualified party.  Your son may not benefit as a result of your solo 401k.  Please click on following links for more information on solo 401k disqualified persons.

http://www.mysolo401k.net/Self-Directed-Solo-401k-Self-Directed-401k-SoloK.html

http://www.mysolo401k.net/blog-for-mysolo401k.html?entry=prohibited-transaction-rules-applicable-to

http://www.mysolo401k.net/Solo-401k-prohibited-transactions.html

http://www.mysolo401k.net/Investments.html

http://www.mysolo401k.net/blog-for-mysolo401k.html?entry=can-you-purchase-real-estate

http://www.mysolo401k.net/blog-for-mysolo401k.html?entry=loan-solo-401k-to-uncle

Thanks,

Lisa in Phoenix AZ