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Updated over 3 years ago on . Most recent reply presented by

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Ali L.
  • Investor
  • Brooklyn, NY
29
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Solo 401(k) funded by LLCs

Ali L.
  • Investor
  • Brooklyn, NY
Posted

Hello. Has anyone created a Solo 401(k) to invest excess real estate income, primarily for investment? I am wondering about tax implications, as real estate income is usually considered passive. In addition, LLCs are generally negative EBITDA. 

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Ashish Acharya
#2 Tax, SDIRAs & Cost Segregation Contributor
  • CPA, CFP®, PFS
  • Florida
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Ashish Acharya
#2 Tax, SDIRAs & Cost Segregation Contributor
  • CPA, CFP®, PFS
  • Florida
Replied
Originally posted by @Ali L.:

Hello. Has anyone created a Solo 401(k) to invest excess real estate income, primarily for investment? I am wondering about tax implications, as real estate income is usually considered passive. In addition, LLCs are generally negative EBITDA. 

The main question is: do you have earned, qualified income to fund the Solo 401k? You cannot fund Solo 401k with passive rental real estate income. 

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