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Updated about 5 years ago,

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Bob Malecki#5 Tax Liens & Mortgage Notes Contributor
  • Investor
  • Kingston, WA
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Solo 401K contribution limit question

Bob Malecki#5 Tax Liens & Mortgage Notes Contributor
  • Investor
  • Kingston, WA
Posted

I have a Solo 401K set up under one of my LLCs that has earned/active income. I recently sold one of the rental properties in my other LLC via private sale and had this LLC invoice the other LLC at closing for a $35K 'facilitation fee" because I wanted to have more active income to contribute to my Solo K. My current P&L for the contributing LLC shows net income after expenses of approx $21K, and I plan to take a few more deductions for travel expenses before end of 2019.

My question is, is my "employee" contribution limited to the amount of net income in the LLC or the amount of earned income? I'm over 50, can I contribute the full $25K or am I limited to the net profit of ~$21K?

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