All Forum Posts by: Jim P.

> If funds are moving from any account there must be a 1099-R is sued.

As far as the in-plan rollover part of this, all I did was move the funds from a savings account at Wells Fargo to a connected checking account.  The checking account was going to be designated Roth.  But since I haven't yet really designated anything, in reality all I did was move funds between a connected savings and checking account that are both under the same 401k trust name.  So I think that wouldn't require a 1099-R?

Yeah, I do plan to get an extension and some professional advice.  But that will take a while this time of year, so I'm hoping to find out some answers here meanwhile.  I'm also going to just not submit a 1099-R for the in-plan Roth rollover for 2016 just in case there does end up being any issues.

Everything I've found from the IRS seems to indicate that there isn't any reason to think that the funds can't be transferred to a 401k (the restriction is specific to an actual Roth IRA, not just any after-tax funds), so I suspect the mysolo401k.net info could be not quite correct (or at least incomplete).

I have a Traditional IRA that includes some contributions during years when the contribution wasn't tax-deductible because I or my wife had 401k accounts.

Last year I did a rollover of the entire Traditional IRA into my Solo 401k, and then did an in-plan rollover of my entire Solo 401k into a separate Roth-designated Solo 401k account.

I'm trying to figure out how to get TurboTax to understand that part of that in-plan Roth rollover shouldn't be taxed because some of the original Traditional IRA money was already taxed (and I haven't yet submitted the 1099-R for that rollover, so I need to do that).

Then I came across this...

https://www.mysolo401k.net/nondeductible-ira-contr...

That article claims that you can't actually rollover nondeductible traditional IRA funds into a Solo 401k at all. Is that true?? I can't find any other source confirming that. If that is true, what am I supposed to do now?

Ok, if I understand everything I need to do correctly (from the above answers and other info), this is my plan so far:

To do now:

• Set up a Solo 401k (with Mark, Brian, Dmitriy, or someone).
• Set up 6 bank accounts inside the 401k: "pre-tax", "Roth", and "after-tax" for me, and those same three for my wife also.
• Rollover my Traditional IRA funds to my "pre-tax" 401k account.
• Rollover my wife's old 401k funds to her "pre-tax" 401k account.
• In-plan rollover of both of our "pre-tax" 401K funds to the "Roth" 401K accounts (tax will be owed).
• 2016 Employee contributions: Transfer $18k from my business account to my "Roth" 401K and $18k to my wife's "Roth" 401K.
• Also transfer a small amount from my business account to my wife's checking account as the remainder of her pay (maybe $2k). Apparently this is a good idea to do.

To do in January 2017:

• 2016 After-tax dollar for dollar contributions: Transfer $35k from my business account to my "after-tax" 401K and $35k to my wife's "after-tax" 401K.  According to this, apparently I can contribute not just 20% of the profit, but possibly all of it up to the $53k/each limit.
• File a W-2 and W-3 for my wife's income (I'm not yet clear about how much income or what all gets reported on it).
• In-plan rollover of both of our "after-tax" 401K funds to the "Roth" 401K accounts (no extra tax owed).

Here's another wrinkle I just found that complicates things.  According @Dmitriy Fomichenko's reply at https://www.biggerpockets.com/forums/51/topics/119..., we could both contribute to the same Solo 401k plan, but our funds have to be tracked separately.  I was wanting to lump all the money together and buy one investment property, but it sounds like it may be complicated or impossible to keep track of who owns what percent of everything if it's all mixed together.  So really we would need separate bank accounts within the 401k plan, and should probably keep all the money and investments separate.

Thanks for the answers.  I would like to be able to transfer her old 401K to our Solo 401K, so it would be worth including her officially in the business at least for that.  I noticed the IRS has info on Husband and Wife businesses here:

https://www.irs.gov/businesses/small-businesses-se....

If I understand correctly, there are 3 different options.  My spouse could be an employee (form W-2), a parter (form 1065), or we could classify it as a "qualified joint venture" where we file two separate Schedule C's for the same business.  

I think any of the 3 options would qualify my wife to contribute to our Solo 401K?  There may be good reasons to choose one option over another, but I'm not sure what all the repercussions would be from each option.

I'm planning to set up a Solo 401K, but I'm having trouble finding information about married couples with Solo 401K's.  Should my wife and I have separate Solo 401K's?  Can one Solo 401K be shared between spouses (both contributing to the same account)?

I'm self-employed with no employees and my business will net about $100K this year.  My wife actively helps with the business, but I've never explicitly paid her with a W-2 or anything like that.  What's the best way to maximize the amount we can contribute to a Solo 401K?

I don't know if I would say you *need* a property manager.  I've been self-managing our rental house on the other side of the country for many years.  Every few years the tenants move out and I fly there (~$350) and spend 1-2 weeks getting it fixed up and rented out again.  We're lucky because it's a high-demand area so it takes no time to rent it out.  There is a little more risk, and it helps if you're in contact with the neighbors so they can alert you if there is anything out of the ordinary going on that you should know about.

It may be tough finding students to move in now since classes have probably already started or are about to, so now you may need to focus on non-students. But in general, I wouldn't bother with MLS for a college town rental. Students aren't using realtors to rent houses. They use craigslist, look at yard signs, and may use rental services. As far as price, the only thing that matters in that kind of market is what the cost is per bedroom.

$500/bedroom sounds high to me if it's a small town, but that might be possible if the demand is high.  When you're trying to figure out what the going rate is, keep in mind that listings you see are always going to be mostly ones that didn't already get leased, so they're likely overpriced.  I usually look at what similar properties are listed for on Craigslist, and then price mine below that.

We're renting out a couple of rooms in our house. I've been calculating and claiming depreciation for a percent of the value of our house based on how many square feet are rented vs. the part we occupy. That part is complicated, but not too bad.

I'm just wondering if it's going to be really complicated when we eventually sell the house. Is it going to be complicated for us or the IRS to calculate the recapture amount. I mean, some years we rented out one room, some years it was two rooms. So the percent of the house rented varies from 0% to 50% depending on the year. And there were a few years when I accidentally depreciated 100% of the house as if it was all rented (oops).

How does that all get computed to figure the recapture amount when we sell it? Do they just look at the actual dollar amount of the total depreciation that we claimed?