Converting SDIRA LLC to Solo 401K

2 Replies

I have been searching the forums and haven't found an answer to the following. I currently have an SDIRA LLC (checkbook IRA) and invest in real estate part time. I have a full time W-2 job. I have 2 questions:

1.  Do I qualify to set up a Solo 401K as a part time real estate investor?

2. Can an SDIRA LLC be rolled over to a Solo 401K?

@James Shelby

It appears that you may not qualify for a solo 401k because your are not self-employed. Here is how the IRS defines self-employment: 

Generally, you are self-employed if any of the following apply to you.

  • You carry on a trade or business as a sole proprietor or an independent contractor.
  • You are a member of a partnership that carries on a trade or business.
  • You are otherwise in business for yourself (including a part-time business)

See following link for more on this:

If or when you do qualify for a self-directed solo 401k, the quick answer is yes a SDIRA LLC can be transferred to a self-directed solo 401k. Here is the quickest way to do this:

Have the self-directed IRA custodian (e.g., if the custodian of the self-directed IRA is American Estate and Trust or IRA Services Trust Company, for example,) transfer the LLC IRA asset in-kind to the self-directed solo 401k. Subsequently, once the LLC has been re-registered in the name of the solo 401k, you can keep the LLC, which would now list the solo 401k as the member instead of the IRA, or you can move the assets inside the LLC (e.g., notes and real estate holdings) to the solo 401k and then dissolve the LLC with the secretary of state.

Thanks for your detailed response Mark. 

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