Can I buy pre-IPO options with My Self-Directed Solo 401K

QUESTION: What if I contribute cash into my solo 401k and then buy pre-IPO options with it? The options are valued by an independent auditor (though not currently traded).

An important aside is that the options are currently in my name - granted to me in lieu of compensation and declared as income on my W2.

ANSWER: Good question. That would result in a solo 401k prohibited transaction because the options were already issued in your name. The IRS would view the transaction as an exchange between the plan (your solo 401k) and a disqualified person (you as the solo 401k owner).  

To learn more about the solo 401k prohibited transaction rules CLICK HERE.