ForumsPrivate Company/Private PlacementsIn-kind Pre-tax Roth Solo 401k Conversion of Private Placement

Forums Solo 401k Private Company/Private Placements In-kind Pre-tax Roth Solo 401k Conversion of Private Placement

  • In-kind Pre-tax Roth Solo 401k Conversion of Private Placement

    George Blower replied 7 months, 1 week ago 3 Members · 4 Posts
  • 3 Replies
  • Top SubjectPrivate Company/Private Placements,Cryptocurrency
    Top ForumsPrivate Company/Private Placements, Cryptocurrency

    John Wolfgang
    Top SubjectPrivate Company/Private Placements,Cryptocurrency

    December 2, 2022 at 1:52 pm

    I recently invested in a private placement using funds from my Pre-tax Solo 401k. I would now like to complete a conversion of this investment to my Roth Solo 401k account. The investment is very recent and I haven’t received any distributions yet so I assume the FMV would be the initial amount invested.

    Is there anything special I need to do for the conversion? Would I just fill out the appropriate conversion form on your website and then change the distribution account such that any distributions will flow back to my Roth sub-account (Fidelity)?

    Thank you!

    John Wolfgang
  • George Blower

    Top SubjectDaily Live Webinar,Solo 401k
    Top ForumsDaily Live Webinar, Solo 401k

    George Blower

    George Blower

    Top SubjectDaily Live Webinar,Solo 401k

    December 8, 2022 at 7:02 am

    Thank you for your good post!

    The ability to invest in alternative investments as well as have Roth solo 401(k) investments are some of the top reasons that clients open solo 401(k) plans with us.

    1. An in-kind and in-plan Roth Solo 401k conversion is both reportable and taxable. Clients provide us the information needed to prepare the required 1099-R by submitting the following online form including the value of the asset (e.g. shares/membership interst in the private placement):
    https://www.mysolo401k.netpretax-to-roth-solo-401k-in-plan-conversion-form/

    • IMPORTANT NOTE: If alternative Investment assets (e.g., real estate, notes, private shares, etc.) are being converted, the fair market value of the asset(s) being converted needs to be listed.

    2. The asset will still be held in the name of the Solo 401k, at the plan level the Roth Solo 401k ownership would need to be tracked.

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