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Results (9,304+)
Dawn Anastasi Solo 401(k) Question
14 January 2014 | 7 replies
If you use your Solo 401(k) to purchase real estate, I understand that there are certain prohibitions on it, such as all income must go back into the property.As far as hiring people to work on the property, from what I read there are disqualified persons and non-disqualified persons.A "friend" is listed as a non-disqualified person.
Robert Burns Prohibited Transactions in Self Directed IRA's
21 April 2017 | 4 replies
If I bought a mobile home or other property with the IRA and collected the lease payments from a lease purchase agreement and paid the federal and state taxes would that constitute a prohibitive transaction? 
David Telp Advice on selecting a good deal on property
18 June 2015 | 5 replies
I haven't heard anyone cite any law or regulation prohibiting the assigning of an REO. 
John Casmon Need 401K transfer to SDIRA Tips
18 May 2016 | 21 replies
That's to set up your 401k after you have a non passive income company.On the 401k side you will want to have a strong fundamental understanding of the rules and prohibited transaction or situations after you get started.  
Bill McGrath IRA Rollover to Self Directed (IRA or 401K)
20 October 2016 | 8 replies
@Bill McGrathFollowing are the similarities and differences between the solo 401k and the self-directed IRA.The Self-Directed IRA and Solo 401k Similarities Both were created by congress for individuals to save for retirement;Both may be invested in alternative investments such as real estate, precious metals tax liens, promissory notes, private company shares, and stocks and mutual funds, to name a few;Both allow for Roth contributions;Both are subject to prohibited transaction rules;Both are subject to federal taxes at time of distribution;Both allow for checkbook control for placing alternative investments;Both may be invested in annuities;Both are protected from creditors;Both allow for nondeductible contributions; andBoth are prohibited from investing in assets listed under I.R.C. 408(m).The Self-Directed IRA and Solo 401k DifferencesIn order to open a solo 401k, self-employment, whether on a part-time or full-time basis, is required;To open a self-directed IRA, self-employment income is not required;In order to gain IRA checkbook control over the self-directed IRA funds, a limited liability company (RIA LLC)  must be utilized;The solo 401k allows for checkbook control from the onset;The solo 401k allows for personal loan known as a solo 401k loan;It is prohibited to borrow from your IRA;The Solo 401k may be invested in life insurance;The self-directed IRA may not be invested in life insurance;The solo 401k allow for high contribution amounts (for 2016; the solo 401k contribution limit is $53,000, whereas the self-directed IRA contribution limit is $5,500);The solo 401k business owner can serve as trustee of the solo 401k;The self-directed IRA participant/owner may not serve as trustee or custodian of her IRA; instead, a trust company or bank institution is required;When distributions commence from the solo 401k a mandatory 20% of federal taxes must be withheld from each distribution and submitted electronically to the IRS by the 15th of the month following the date of each distribution;Rollovers and/or transfers from IRAs or qualified plans (e.g., former employer 401k) to a solo 401k are not reported on Form 5498, but rather on Form 5500-EZ, but only if the air market value of the solo 401k exceeds $250K as of the end of the plan year (generally 12/31);When funds are rolled over or transferred from an IRA or 401k to a self-directed IRA, the amount deposited into the self-directed IRA is reported on Form 5498 by the receiving self-directed IRA custodian by May of the year following the rollover/transfer.Rollovers (provided the 60 day rollover window is satisfied) from an IRA to a Solo 401k or self-directed IRA are reported on lines 15a and 15b of Form 1040;Pre-tax IRA contributions on reported on line 32 of Form 1040;Pre-tax solo 401k contributions are reported on line 28 of Form 1040;Roth solo 401k funds are subject to RMDs;A Roth 401k may be transferred to a Roth IRA (Note that from a planning perspective, it may be advantageous to transfer Roth Solo 401k funds to a Roth IRA before turning age 70 ½ in order to escape the Roth RMD requirement applicable to Roth 401k contributions including Roth Solo 401k contributions and earnings.)
Scott Nipp Self-directed IRA profit question...
30 May 2015 | 9 replies
If you take receipt of the money personally, instead of having it flow back to the IRA, that would be a prohibited transaction, and treated as a distribution from your IRA.  
Nick Scalero Self-Directed IRA questions
19 February 2010 | 25 replies
It can also be a disaster if you were to participate in a prohibited transaction.As for speaking with a CPA, I do recommend it but it goes without saying that your CPA should be familiar with RE and qulaified plan tax implications.
José Linares SD ESA (Coverdell)
13 May 2016 | 3 replies
They can participate in the same investment, so long as they do not cause prohibited transactions, including enabling transactions.
Nathan Williams Should I be worried about the UBIT / UBTI tax and an SDIRA?
16 February 2018 | 10 replies
The point is this - you personally must understand the prohibited transaction rules, and one of the basic ones is your involvement as disqualified person, and if something is unclear seek professional guidance. 
Chris Pike Found A Deal... But Seller Has Depreciated The Asset Too Much
13 October 2017 | 20 replies
Perhaps enough of an incentive could be provided by you to her without making the deal prohibitive for yourself.