Serve a Real Estate Agent of Solo 401k Real Estate Purchase

QUESTION:

Do you have information regarding actions that government restrict in using solo 401K money in real estate investment? For example, I am a real estate agent and I would like to invest in real estate using solo401K money, is there any regulation or rules saying that trustee (myself) cannot make commission from the transactions etc. Do I have to use other agent to buy and sell for me?

ANSWER:

Great question and yes the following section of the prohibited transaction rules prohibited the solo 401k trustee from personally benefiting from an asset of a the solo 401k plan.

• Receipt for consideration by a fiduciary for his own personal account from any party dealing with the plan in a transaction that involves plan income or assets.

Essentially, if you receive a commission stemming from the purchase of real estate by your solo 401k, it would be in violation of the above prohibited transaction rule. To read more about the solo 401k prohibited transaction rules and for sample illustrations.

As such, while you can technically serve as the real estate agent of the property being bought or sold by your solo 401k plan, it would be prohibited for you to receive a commission.

To learn more about the solo 401k real estate purchase rules, .