Solo 401k LLC Form 568 Required?

6 Replies

Hi there

I am in California and have a Self-Directed Solo 401k that owns a LLC for holding only rental properties and receiving rental incomes. Anyone knows if Form 568 (Return of income) filing is needed?

thanks

If the solo 401K is the sole member of the LLC then no.

Hi George,

Thanks for your info. The Solo 401k is the sole member of the LLC.

@Thomas Kwan Make sure you complete FTB Form 3500.  You must receive the approval letter back from the FTB before relying on the § 23701x exemption.

Hi Logan

Thanks for the info. The form 3500 is for saving the $800 Franchise Tax right? Yeah, I am thinking to fill that form out, but it is such a complicated and long form. Do you know if I need to file that once a year or not? I also have a non-recourse loan for the rental and wonder if it affects my exemption status if applied.

Also, filling that form out or not, 568 is a separate concern right?

thanks again for your time

@Thomas Kwan

1. As long as the properties are buy and hold (not flips) the non-recourse loan will not affect the exemption status.

2. Correct that Form 568 still does not apply.

@Thomas Kwan  Form 3500 is one-time.

Assuming the exemption is obtained, then as far as annual FTB filing requirements go, consult with your tax professional regarding Form 199 (or 199N).

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