Multiple LLC's and Solo 401k

[Nick Ho]

I am new to BP and this is my first post. I want to take this opportunity to thank all members for all the topics that I have read on these forums these past couple days. Wonderful stuffs and tremendously helpful.

Me and my wife have 4 LLC's and each has rental properties producing passive income. We also have rental properties outside of those LLC's too. I have a full-time job with a 401k. My wife have a part-time job with a Simple IRA.

We plan to open two Solo 401k, husband and wife, and fund it using distribution from the LLC's, is that ok? I also plan to roll over our old 401k accounts to these later too.

Or, does each LLC's have to sponsor separate Solo 401k for me and my wife? That means 2, husband and wife, accounts time 4 LLC's make 8 separate Solo 401k accounts. That kind of set up with small funding chunk everywhere, is not very conducive to making investment.

Thank you for any info you may offer.

Nick

[Walt Payne]

@Nick Ho  You can't use passive income to fund a solo 401K. What I did, with help from @Dmitriy Fomichenko, is to set up a solo 401K on a LLC that I use for the renovation of my properties. That is active income (billed to my holding LLC) that can fund my 401k. I am also doing flips using that LLC, which can also fund the 401k.

The other thing you can do is funnel money from your wife's Simple IRA into her side of the solo 401k. If you can afford it, she could do a max contribution and then do a transfer each year.

There is a lot of information out there about  solo 401k plans, and some important rules to know. If you go to Dmitriy's website www.sensefinancial.com there is a lot of information. You can also find good info at many other provider websites.