Interesting Scenario

[Pat L.]

Our 401(k) solo holds a 50% 1st position note on an investors rental SFH.

We are taking it back DIL for mtg arrears. With a little rehab it will sell for a good $25-$30k above the balance owed.

My TAX interpretation of the 'deal' is the following.....

-: the property was & remains an arms length transaction.

-: title to the property would now be assumed by the 401(k) solo due to the default of the note & the subsequent execution of the DIL.

:- now the profit from the eventual sale of the property should be held tax free in the 401(k) solo for future disposition.

am I Correct ???

(I couldn't for the life of me get the @ to work for Steve Hamilton et al)