Rents --> my LLC for contract work, LLC $$ --> into Solo 401k

[Erik Kubec]

Hey Folks,

Here is the strategy I am using.  It seems pretty complex.

My wife and I have rental properties.

My LLC, taxed as a sole prop, has a 401k with another property in it.

For the 3 rental properties my wife and I own, I can take rent/cash/flow/income from that and pay my LLC to do work on it. Then I can defer payment to myself from the LLC by contributing to the solo 401k. Thus, I can defer taxes.

I believe as long as the LLC invoices under $2500 per UOP (for example, insulating the crawl space) and the charges are market based, reasonable, and are not abusive, I can use de minimis to expense.

So rentals pay LLC with an invoice that is under $2500 per UOP, employee of LLC defers taxes by making contribution to solo 401k. Note, this LLC does not do any work on the property held by the solo 401k. Nor do I personally.