Absolutely Confused...Let's Get Real about SOLO-401K's

[Gary Kane]

I have been reading (scouring) the forum on SDIRA/SDIRA-LLC/SOLO-401K information, and am absolutely confused! And the more I read, the more cautious I am getting!

So what is the real deal on these setups?  Do I need to worry about the IRS breathing down my back every year with my SDIRA? Or SOLO-K?

And let's clear the air on SOLO-K's...what is the true requirement on being eligible to set up one of these for REI'ing?

1. I am a full-time W-2 employee, with a 401K already.
2. I am not self-employed (earned income), but some say I could be easily (EBay, MLM, etc.).
3. Does selling on EBay REALLY qualify as self employed, able to set-up a SOLO-K? A backdoor?
4. How long do you have to be self-employed before REI'ing.
5. Wouldn't the very nature of doing REI'ing (Rehab and sell) qualify as earned income? Wait, you have no proof of earned income yet, how can you have a SOLO-K...chicken vs the egg syndrome?
4. So the IRS thinks I'm an EBay seller, and now I have all this REI income (Buy and hold, Rehad/Flip, etc.). What will the IRS say?

All my scouring has led me to believe that a SOLO-K would be more efficient for REI. I want a few rentals, and do some Buy/Rehab/Sell for profit, and also do some JV's (lending)...But I want to be legit and not worry about violating any IRS rules.

Need some help...hope I'm not rustling some feathers, just need some clarification.