Solo 401k VS SD IRA

[Jeff Caravalho]

I read on another post that IRA custodians don't like solo 401k's because they don't get commission. Can someone explain to me the fees & services for a solo 401k vs a SD IRA. I'm self-employed & had someone recommend the SD IRA over the solo 401K, which counters what others on this forum have said (ie. solo 401K is great for the SE)

Another dilemma I have is the fact I want my 1st rental for the tax advantages, IE. I would like to work on it, manage it, etc. - I know that's prohibited. Question is do I have the cart before the horse? Should I acquire 1st property outside of my IRA to get tax advantages THEN acquire IRA properties after that? Thx.

[Steven Hamilton II]

Originally posted by @Jeff Caravalho:

I read on another post that IRA custodians don't like solo 401k's because they don't get commission. Can someone explain to me the fees & services for a solo 401k vs a SD IRA. I'm self-employed & had someone recommend the SD IRA over the solo 401K, which counters what others on this forum have said (ie. solo 401K is great for the SE)

Another dilemma I have is the fact I want my 1st rental for the tax advantages, IE. I would like to work on it, manage it, etc. - I know that's prohibited. Question is do I have the cart before the horse? Should I acquire 1st property outside of my IRA to get tax advantages THEN acquire IRA properties after that? Thx.

 ALWAYS SOLO 401K. The main advantage is matching contributions and you can fund more. Second is that on real estate transactions inside the account there is no UBIT.

Acquire wherever you can afford to first. Notes and transactional funding is the best thing inside a retirement account. That is not to say rentals are a bad item to hold there. The depreciation deduction isn't as important inside a solo 401k.

You can manage it, you just cannot do work without being paid FMV from the account. I recommend not doing that at all. But you can hire non linear family member to do said work and it would not be a prohibited transaction.