Solo 401k self employment requirement

[Mike Knowles]

Hi all,

I've read through most of the threads related to SDIRAs and Solo401ks on the first dozen pages of this forum, as well as info at some other sources. One question I still have about Solo401ks, though, revolves around the self-employed "business" requirement.

It's my understanding that you can use a newly formed business, as long as it has the intention of generating revenue for profits and making significant contributions to the plan. This can be an LLC, sole proprietorship, etc, and can be part-time. Sounds great.

Question 1: Are there limitations on the types of business NewCo is involved with? Specifically, can NewCo be engaged in the business of purchasing rental properties? Or simply investing in general?

Question 2: Does NewCo need to have a regular payroll? If I were running a sole proprietorship or LLC with just myself in it, I wouldn't need or want to take money out of it until taxes were due.

Question 3: The Solo401k loan provisions can be very flexible. Could I borrow money from the 401k with the intent of using it to purchase rental properties? i.e., this essentially funds the LLC/sole proprietorship. I read an example of something similar at:

http://www.jeffnabers.com/2008/05/22/borrowing-money-from-your-solo-401k/

Thanks in advance.