For tax reasons, Is there a time limitation that you have to hold real real estate that was purchased within a Solo 401K? I want to avoid being penalized for a short term gain if I sell a property within one year.
Thanks.
Barry Warner
I have not done this so far, but since this is tax advantaged account, you will not get capital gain tax even if it is a million gain single day buy and sale.
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Jil is correct, but do you have any financing on the property? If so some tax might be due.
No financing was involved in purchasing this property as it was paid for with cash from my Solo 401K account. How would I handle reporting this to the IRS next tax season after getting a statement (1099-S i think) from the title company reporting the sale of the property?
I’ve only dealt with self-directed IRA which requires a company to act as trustee of the account. They have forms to fill out whenever you buy or sell an investment. I think this should be a question for whoever administers the 401k. You need to make sure closing is done right. You don’t want to deposit funds into your personal account then transfer to the 401k account. The funds from closing should go directly to the 401k account.
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Yes, this is very important point !