ForumsReal Estate InvestmentsSolo401k LLC – annual tax filing requirements

Forums Solo 401k Real Estate Investments Solo401k LLC – annual tax filing requirements


  • Solo401k LLC – annual tax filing requirements

    Mark Nolan replied 5 months, 2 weeks ago 2 Members · 2 Posts
  • 1 Reply
  • Heriberto A.

    Top SubjectReal Estate Investments,Transfers/Rollovers
    Top ForumsReal Estate Investments, Transfers/Rollovers

    Heriberto A.

    Heriberto A.

    Top SubjectReal Estate Investments,Transfers/Rollovers

    January 27, 2024 at 2:04 am

    Hi, the LLC that is owned by my Solo401k purchased a property in 2023. The property is titled to this LLC (Therefore an asset of the Solo401k). The property was subsequently renovated by a contractor in 2023. Does the LLC now have to prepare and issue this contractor a 1099-NEC for the amount that the LLC paid them? And assuming that the LLC has to file a tax return (partnership between my wife’s Solo401k and my Solo401k) , how would I report income so that it is clear to the IRS and the state that this is a qualified tax deferred account (assuming a 1065, curious as to how to show the tax exemption on the filing?

    Thank you in advance for any guidance that is provided.

    Heriberto A.
  • Mark Nolan

    Top SubjectSolo 401k,Solo 401k Contributions
    Top ForumsSolo 401k, Solo 401k Contributions

    Mark Nolan

    Mark Nolan

    Top SubjectSolo 401k,Solo 401k Contributions

    January 29, 2024 at 3:15 pm

    Yes, for an LLC with multiple members (e.g., 2 or more IRAs), a federal tax return Form 1065 will be required to be filed every year. The Form 1065 is filed with the IRS and is for informational purposes only; meaning, taxes are not due at the LLC level since the only members are the self-directed IRAs.

    Check with your cpa to determine if a 1099-NEC needs to be issued and see the following IRS publication.

    If you do issue one, the LLC will be the payer and you will use the LLC EIN as well on the form.

    The publication references some exceptions:


    Some payments do not have to be reported on Form 1099-MISC, although they may be taxable to the recipient. Payments for which a Form 1099-MISC is not required include all of the following.

    • Generally, payments to a corporation (including a limited liability company (LLC) that is treated as a C or S corporation). However, see Reportable payments to corporations , earlier.

    • Payments for merchandise, telegrams, telephone, freight, storage, and similar items.

    • Payments of rent to real estate agents or property managers. However, the real estate agent or property manager must use Form 1099-MISC to report the rent paid over to the property owner. See Regulations section 1.6041-3(d); Regulations section 1.6041-1(e)(5), Example 5; and the instructions for box 1.

    • Wages paid to employees (report on Form W-2).

    • Military differential wage payments made to employees while they are on active duty in the U.S. Armed Forces or other uniformed services (report on Form W-2).

    • Business travel allowances paid to employees (may be reportable on Form W-2).

    • Cost of current life insurance protection (report on Form W-2 or Form 1099-R).

    • Payments to a tax-exempt organization including tax-exempt trusts (IRAs, HSAs, Archer MSAs, Coverdell ESAs, and ABLE (529A) accounts), the United States, a state, the District of Columbia, a U.S. territory, or a foreign government.

    • Payments made to or for homeowners from the HFA Hardest Hit Fund or similar state program (report on Form 1098-MA).

    • Compensation for injuries or sickness by the Department of Justice as a public safety officer (PSO) disability or survivor’s benefit, or under a state program that provides benefits for surviving dependents of a PSO who has died as the direct and proximate result of a personal injury sustained in the line of duty.

    • Compensation for wrongful incarceration for any criminal offense for which there was a conviction under federal or state law. See section 139F, Certain amounts received by wrongfully incarcerated individuals.

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