SOLO 401K: A TAX SAVING STRATEGY FOR REAL ESTATE INVESTORS DMITRIY FOMICHENKO
A large part of our clientele is involved in rental
Every now and then we hear real estate success
property investment, including single family homes,
stories from our clients but this one was even
multifamily apartments, and even commercial real
beyond our imagination.
estate. Investing in a rental property with your
retirement plan can help you restrict your tax
One of our clients,
burdens while offering the benefits of real estate
Bill, invested in an
investing.
organic
mango
farm in Panama,
• Taxdeferred growth of rental income
spread across 2.5
• Ability to finance property purchase using non
acres, and it was
recourse loan without paying UBIT tax
managed by a local
• Retirement account pays for maintenance experienced
turnkey operation company. His next investment
came out to be a Neem tree farm in Brazil, and he
Pay Taxes on Capital Gains at the time of
Withdrawals Only
was able to make these investments with a self
directed Solo 401 k plan. Any income procured from
these farms in the future will directly go into the self
The same rules apply to the capital gains realized
directed account.
from the sale of a property within your Solo 401 k
plan. Unlike regular real estate transactions, you can
A selfdirected Solo 401 k plan helps you in creating
defer taxes on your capital gains to as far as your
a diversified retirement portfolio while offering
withdrawals. It allows you to keep the entire gains
complete freedom in asset selection. It is time to
within your plan, and these funds are available for
leverage your retirement savings and build a
your upcoming real estate transactions.
retirement account that will truly outlast you.
Dmitriy Fomichenko
Dmitriy Fomichenko is President and Founder of Sense Financial, a leading provider of retirement
accounts with "Checkbook Control": the Solo 401k and the Checkbook IRA. To learn more about
the Solo 401k plan, please visit sensefinancial.com or email us at [email protected].