ForumsSolo 401kWhat tax forms do I need to file for solo 401k?

Forums Solo 401k What tax forms do I need to file for solo 401k?

  • What tax forms do I need to file for solo 401k?

    5 Replies
  • Tom Lafferty

    Top SubjectSolo 401k,Solo 401k – 5500-EZ
    Top ForumsSolo 401k, Solo 401k – 5500-EZ

    Tom Lafferty

    Tom Lafferty

    Top SubjectSolo 401k,Solo 401k – 5500-EZ

    July 6, 2021 at 2:08 pm

    I was under the assumption that my cpa has been filing any necessary forms for our Solo 401k for the last several years, and found out that is not the case. I also thought that nothing was required if the total value of our investments in the solo k were under $250,000. Is that correct?

    Until 2020 we had only invested in 4 apartment syndications at $50k each, which all used non-recourse debt for financing, so hopefully no UBTI tax? It could be argued that the value of those investments was under $250k until several of the properties were sold in 2020 and 2021. We also invested in a pre-IPO stock with about $100k, so I’m assuming that is the amount at which I should value that investment? It is now well above the $250k mark. I asked our CPA if they could take care of it, but the fees were HUGE. Long story, but I’m not going that route if I don’t have to. At this point I am trying to figure out if we need to file a form 5500 and/or a 990-T? Is this enough info to go on, or did I leave something out? Sorry for a million questions in one post!

    Tom Lafferty
  • Mark Nolan

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

    Mark Nolan

    Mark Nolan

    Top SubjectSolo 401k,Solo 401k Contributions

    July 6, 2021 at 2:29 pm

    @shamilton

    Steven Hamilton

    Top SubjectSolo 401k,IRA LLC

    Is an expert on UBIT/UDFI and on preparing Form 990T.

    We can help you prepare the Form 5500-EZ as well.

  • Steven Hamilton

    Top SubjectSolo 401k,IRA LLC
    Top ForumsSolo 401k, IRA LLC

    Steven Hamilton

    Steven Hamilton

    Top SubjectSolo 401k,IRA LLC

    July 6, 2021 at 4:15 pm

    Great questions with a complicated answer.
    There are two different items to address:
    Form 5500/EZ: $250k+ Based upon Fair Market Value on 12/31/2020 https://www.irs.gov/instructions/i5500ez#idm140490140682768
    Form 990-T: UBTI of 1k or more. In the case of a solo 401k that will NOT include debt financed income.

    Many firms have no idea what they are looking at or even asking when presented with these things. Those firms are often focused on pounding out tax returns and that is it. A quality firm who works with clients in strategizing can make all of the difference in the world.

    • Tom Lafferty

      Top SubjectSolo 401k,Solo 401k – 5500-EZ
      Top ForumsSolo 401k, Solo 401k – 5500-EZ

      Tom Lafferty

      Tom Lafferty

      Top SubjectSolo 401k,Solo 401k – 5500-EZ

      July 6, 2021 at 6:19 pm

      Thanks Steven. That’s what was so surprising, as we do have a very qualified, highly experienced tax team. They even have a ton of experience with real estate syndicators, which is why I was very surprised. To be fair, we have a team of three, and that reply did not come from our lead cpa.

      Either way, I may get in touch with you to handle the reporting on just the retirement funds in this case. In addition, I am an active real estate syndicator myself, and am fielding calls weekly from investors looking for a good CPA who has RE syndication experience. Maybe we can discuss sending them your way?

      Tom Lafferty

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