1. Does the Solo 401 LLC operating agreement
only permits real estate transactions or any other investments?
ANSWER: The operating
agreement will include language that lists all investments not disallowed by
the IRS regulations and will also list disallowed investments. Disallowed
investments include collectibles, works of art and alcoholic beverages, to name
a few.
2. Do you need to file any
tax returns for the LLC?
ANSWER: A tax return is only
required if the LLC has multiple members and it will be your responsibility in
conjunction with your accountant to prepare and to file it.
3. For myself any wife will
the LLC be single member or multiple with both of us funds coming from
respective solo401k account?
ANSWER: The LLC will be deemed
single member since both of you are participating in the same solo 401k plan
since the solo 401k will be the member.
4. Can I also become a
member of this LLC (apart from Trustee of solo401k ) using my own funds? Will
that be prohibited?
ANSWER: Yes you can as long as it is done at the start; however, the LLC will be deemed a multiple member LLC.
5. What
if LLC uses finance to buy real estate, will there be any UBIT tax? If
finance is used by Solo401k trust there is no UBIT tax.
ANSWER: UBIT will not apply if debt financing is used to invest in real estate.
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