UDFI and UBIT Taxation Dodge With i401(k)?

[Bryan Hancock]

So I am doing more digging on self-directed 401(k)s. Specifically I am interested in the i401(k) and LodestarSD Solo 401k, although I am not sure that they are functionally much different other than the fee structure. I'm digging into this.

My question is about both UDFI and UBIT for loans taken up to $50k or whatever the limit is for these vehicles. If these constructs allow one to take a personal loan from their closely-held company do you still have to pay UDFI and/or UBIT taxes on flip-type investments if this is where the money is invested?

What say you tax wizards? Hopefully what is written above makes sense.