Occupy Solo 401k Owned Real Estate

QUESTION:

My family (and therefore my business) is looking at relocating out of state. We’d need about $250k for a home, which would also be the headquarters of my company. Is it possible to borrow from my solo 401k for that sum and what would the implications be? We would be selling our house in Florida, which we expect would sell rather quickly and would allow repayment of this loan within a few months.

I’m also vaguely remembering a provision in my 401k that allowed for purchase of real estate. Maybe it is possible for the solo 401k to own part of the home for that sum, since it would also be the company offices? And then maybe the company could sell it back to me once the sale of the FL  house was complete and I could essentially refund my 401K?

Just trying to figure out if there are any options here.

ANSWER:

Unfortunately, the solo 401k cannot invest in real real estate you will also occupy for your personal dwelling, as doing so would be considered a prohibited transaction since you would have personal use to the home. The maximum the solo 401k can borrow from her solo 401k is 50% of your solo 401k not to exceed $50,000.

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