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Updated 11 months ago on . Most recent reply
Can I create a Solo 401K with only rental income?
I rent out the in-law unit in my backyard. I also have a full time W2 job. I want to roll over my former employer's 401K into a solo 401K so I can more flexibility wrt investments. I don't want to put my rental income into a solo 401k if I don't need to.
How can I setup a Solo 401k if I have only rental income? I read that you can setup solo 401K if you have only Schedule C income and not Schedule E income.
Most Popular Reply
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- Solo 401k Expert
- Anaheim Hills, CA
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John, rental income is considered to be passive. You need legitimate self-employment activity or business with "earned" income to be eligible for a Solo 401k plan.
You can't contribute passive income from schedule E, but earned self-employment income from schedule C is eligible, so your understanding is correct.
- Dmitriy Fomichenko
- (949) 228-9393
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