qualifying for a solo 401K?

[Russell Roberts]

I have a group 401K plan at my W-2 employer. I have an unexpected opportunity to transfer funds out of 401K plan while I'm still employed. Yeah! I'd like to transfer funds to a self directed retirement plan and invest largely in real estate syndications which take advantage of debt leveraging. I know a self directed IRA would be subject to UDFI, so I"m interested in solo 401k instead, which is exempt from UDFI.

I don't currently have self employment income, which I need to qualify for solo 401K. However, I'm a major volunteer of Information Technology professional services to a local non-profit Christian school for the last 13 years. I volunteer for mission, not $, and have likely saved organization >$100,000 over that time.

Finally to my question: How much $ do I need to make to legitimately qualify for creating a solo 401K as the destination for the transferred retirement funds? If I billed the non-profit a nominal amount of say $150 per quarter and received an annual 1099 for $600 of services, would that satisfy a solo 401k IRS auditor's scrutiny?

[Dan Schwartz]

@Russell Roberts if the opportunity is time-limited, then evacuate the money to an IRA ASAP. Doesn't even have to be a self-directed one. Just any old IRA. You can always roll an IRA into a solo 401k down the road. Again, this advice is if your time window on getting the money out of the work 401k is shorter than the time it will take to start a legitimate business in order to have a solo 401k. Good luck!