The Self-Directed Solo 401k Do's & Don'ts | Checkbook Control Solo K

While a self-directed solo 401k is a great tool for investing in alternative investments such as precious metals (like gold and silver), real estate, tax liens, and promissory notes to name a few investment types, as well as for processing a solo 401k participant loan, not everyone is aware of the self-directed solo 401k rules. This blog post is meant to help you understand the solo 401k rules so that you don't get into hot water with Uncle Sam. 

List of the Self-Directed Solo 401k Do's and Don'ts (Note: feel free to comment below if you think of other do's and dont's)

Do open a solo 401k with a reputable solo 401k provider-the solo 401k provider is responsible for all the IRS solo 401k plan updates, so opening a solo 401k with a company  looking to make a quick buck and who has not been in business for a number of years is good recipe for an IRS audit.

Do get an employer identification number (EIN) for the solo 401k-do not use your social security number or business EIN. 

Do open the solo 401k bank account or solo 401k brokerage account in the name of the solo 401k using the solo 401k plan's EIN. 

Do invest the solo 401k in investments that are permitted under the regulations-permitted investments include tax liens, private placements, real estate (both domestic and foreign--provided the country is not on a government watch list), gold and silver bars and coins, trust deeds and equities, to name a few.

Do title all solo 401k investments in the name of the solo 401k.

Do not have the bank issue a credit card in the name of the solo 401k or in your name for the benefit of the solo 401k. However, the bank where you open the solo 401k bank account can issue a debit card in the name of the self-directed solo 401k.

Do not use the solo 401k funds to pay for personal or business expenses.

Do not process a solo 401k participant loan until the solo 401k loan documents have been drawn up by your solo 401k provider.

Do not deposit solo 401k investment gains into your personal bank account. 

Visit to learn more about the rules applicable to a self-directed solo 401k plan.