SD401k and foreign RE investment

[Enrique Andrade]

Can a solo 401k be used to invest in foreign RE?

[Brian Eastman]

@Enrique Andrade

Yes, but it can get complicated to the point of being non-beneficial.

Firstly, keep in mind that all disqualified party rules still apply.  The foreign real estate is exclusively an investment asset of the 401k and there can be no use by you or family.

While US tax law allows the ownership of foreign real estate, the 401k trust entity is unlikely to be able to directly vest title to property in the foreign country.  As such, you will need to form some variant of business entity or trust in-country.  The 401k will be the/an owner of that entity that can vest title to real property.

The income from the property will be tax-deferred in the US, but any local property, hotel or income taxes will still apply.