Clearly, both of these can't be true.My friend's argument is that he has already paid taxes on the original $80k he used to buy the land, so why can't he just roll over the $60k profit and avoid the captial gains tax on the whole amount.

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 (IRA 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.)

And more importantly you also face the not inconsequential risk that the bank will be unwilling to refinance (roll over) the loan.

Looking for feedback positive or negative, and a slap in the face if necessary… For clarification: when I refer to SDIRA I am talking about having the ability to invest in Notes, Real Estate etc… at my direction….High Level Overview: Long term goal:Buy Notes and Rental property; with my SDIRA, and the kids down the street have a rather lucrative lemonade stand I may take them national… JFunding / Structure:Funding is going to be difficult; I have no existing IRA; and my only 401k is active and doesn’t allow active rollovers.

If you keep on grinding and making the right calls you win more than you lose and continue to build your bank roll over time).Thanks again!

Your uncle could rollover all or some of his IRA into a self-directed IRA, obtain loan paperwork from a lawyer, and use a lawyer or broker to close your deals (as is customary in your state).

Just wondering what has happened with the qrp in the llc.we are doing our first gap fund with "our own" money.I'm looking to roll over funds from a tsp into either a self-directed ira or a qrp but even with all of the information sources, I still can't figure out which one is most advantageous.For the forseeable future, we plan on doing mostly gap funding.Any input is greatly appreciated.

As a trustee you could direct investments into any permissible investment, including real estate.Note, that while you could roll over most other retirement assets into your SD401k plan, you can only make additional contributions if your business has a payroll.Sorry if this is too top level.

You have a sufficient track record and credibility to start talking to larger lenders and negotiate a rollover arrangement with a professional lender.

Most people roll over and end up broke and out of business.That is especially true, if there are potential criminal penalties involved as there are with the Patriot Act, OFAC, and Anti Money Laundering.