Solo 401k Eligibility

[AJ Smith]

I have done some searching on solo 401k eligibility, I have a couple main questions. For context, i own several small multifamily units that i self manage without employees and am interested in tapping into the tax incentives of a solo 401k. Looking for some clarity / understand on if/where I'm wrong:

1. Rental real estate is considered a passive activity, therefore I would not qualify for a solo 401k.

2. I am my own property manager for these properties, so if I were to pay myself a market rate salary for this, I could use that salary to open and fund a solo 401k. For example, say I were to pay myself a salary of 15k annually for property management, I could contribute this 15k to a solo 401k and decrease my overall taxable income by 15k? I also have a W2 income and contribute to an employer sponsored plan, but from what I've read I can still qualify for a solo 401k for the part time property management

[Justin Windham]

@AJ Smith

Keep in mind that while you could only contribute to the Solo 401k based on your earnings, you would not need to receive the entire $15k in salary or guaranteed payments to be eligible for a Solo 401k. You and your tax advisor might choose a smaller amount to receive as earned income, keeping the rest passive and free from self-employment taxes.