Solo401k Prohibited Transaction Question

[Brandon Powell]

Anyone have an opinion on the following?

I own a property held in a non retirement LLC of which I own 25% and my wife also owns 25% of the LLC. Can I sell this property (owned by the LLC) to a non related buyer and hold a note in my solo401k?

[Brian Eastman]

@Brandon Powell 

That would absolutely be a prohibited transaction in the eyes of the IRS.

By providing the loan to the buyers via your 401k, you are facilitating the sale of the property.  This clearly provides a benefit to you and your wife, both of whom are disqualified to the 401k.

Who setup your Solo 401(k)?  Do they not provide guidance for these types of questions?  They should.