Upgrading from a Self Directed Roth to a Solo Roth 401k.

[Joseph Hammel]

Hi, So I have a self directed "checkbook control" roth that currently holds 2 properties free and clear. I'm looking to change to the Roth Solo 401k. I currently use Advanta IRA and have been really happy with them. My main portfolio is doing very well at 26 or so properties and 94 ish units. I want to have the ability to do leverage in the 401k and I understand that the UBIT tax is not applicable in the 401. I also want to be able to contribute to the 20500 at 100%. So I will walk through my plan and add questions along the way if any of you gurus want to verify I'm on the right track.

Step one. Open solo roth 401k and roll the IRA into it. Does anything need to change with the holding LLC with that change?

Step two. "pay myself" a fee for managing or consulting or whatever and 1099 myself $20500. Then I get to write that off of my rentals right? I know, not the 401, talking my main portfolio.

Step 3. Contribute the 20500 to my new Solo 401k. Because its roth I pay the taxes now. 

Step 4. File a sched c on the 20500 and pay the tax and self employment tax on it. 

Between writing it off on the rentals I will pretty much just be paying the self employment tax. 

Second question, Can I still make $6000 roth contributions as well? (my wife still has a w2 job) If she quit would I be able too with my sched c income?

I have some higher level questions above this like adding employees ect. Ready to talk to an expert. Willing to move to a different admin as well.

Thanks!