Tuesday, May 13, 2014

How much can I lend from my solo 401k for an unsecured loan?



http://www.isolo401k.com/

QUESTION: How much can I lend from my solo 401k for an unsecured loan? My beginning balance is $208,000.

ANSWER: The self-directed 401k regulations do not place a dollar restriction on loan investments (aka promissory notes) as long as the loan is an investment and not a loan to the solo 401k owner. Also, the promissory note cannot be made to a disqualified party and the investment must be made with the intent to grow the 401k.

See following link for a list of disqualified parties.
http://www.mysolo401k.net/Investments.html

See following link for prohibited transaction rules.
See following link for promissory note investment sample procedure.

Thanks Linda in California

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