1031 Like Kind-Exchange/Portfolio Lender Question

[Andrew Pettit]

Good Afternoon Everyone,

              I am going to use my parents as a portfolio lender and I was wondering when I use thier 401K to execute the aquistion of a property what will the tax implications be when using the 401K and can I use a 1031? I am looking for more advice, thanks. 

[Brian Eastman]

@Andrew Pettit

@Dave Foster makes an excellent point.  You are a disqualified party to your parents 401(k) plan.  If they are borrowing from or taking distributions from the 401(k), then it is no longer a 401(k) at that point and there is no issue.  If they are thinking of lending from the 401(k) and it is a self-directed plan - then any transaction that touches you is going to violate the rules.