I currently have a self-directed solo 401k that holds both pretax and Roth funds. I want to pool both sources of funds in the same real estate property investment. What do I need to do to be able to do this?
Yes, you could purchase property using both Pretax and Roth funds from your solo 401k plan. The property would be purchased in the name of the solo 401k Plan. You would need to wire money for the purchase from both sources (i.e., the pre-tax account and the Roth account) of the solo 401k to purchase the property.
While title to the investment property would be in the name of the solo 401k plan, going forward you will need to allocate income and property expenses between the Pretax and Roth sub-accounts based on the ownership percentages. Income and expenses would need to be shared in proportional to the ownership percentages. For example, if the Solo 401k purchased a property for $100K and it was a 60/40 split between the Pretax and the Roth sources, the purchase, expenses and income would be allocated based on this 60/40 split.
Another option is to invest both the pretax and Roth solo 401k funds in an LLC so that title to the property is taken in the name of solo 401k funded LLC. This would allow all of the funds to flow through one bank account (the LLC bank account). VISIT HERE to learn more.