solo 401k ?

[kenmoremmm]

i am looking at starting a solo 401k for the sake of using my 401k for a self-directed account. i have rollover funds from a previous employers 401k plan that i would like to roll into this solo 401k. i don't own a business, but i think i could start something on the side that would generate $100/yr or so - enough to report on my taxes to allow me to claim a business. i would not be able to contribute directly to the solo401k, but i believe i can do the rollover.

question on the business end of things: how much annual income would i need to justify a business? what would happen if i had a year (or more) of no income? who monitors whether the solo401k can remain open?

thanks!

[Paul der Krake]

Nobody cares. But if your account gets above $250,000 in assets you have to file form 5500 once a year.

[IsThisAGoodUsername]

Within the USA, I believe the IRS starts giving you extra scrutiny if you go three years without a profit. I believe in general small businesses income tax returns are scrutinized more closely.  So although I'm sure you're being absolutely truthful on your tax returns, this is another reason to be extra truthful.

Is there a reason why you want to roll the previous 401k into a Solo 401k instead of into a Traditional IRA. Are you preparing to do backdoor Roth contributions?

I have run my own side business (I'm the owner and only employee) for 20 years now. I'm a sole proprietor and include schedule C on my federal taxes. My business had several years of negative net income at the beginning.  I have to kick in taxes, of course, at the state and city level. All I had to do was get a vendor's license from the Secretary of State to do business as, which I think cost maybe $20. Because I'm a service provider, I have to collect, report, and pay sales tax to my state.

[kenmoremmm]

i would like to do self-directed 401k which i believe through a solo 401k will be easier to manage. the primary reasons therein are to avoid UBIT and UDFI that would otherwise occur from the syndications i would like to invest with.

i suppose this could be done via 401k, but believe there are some relative drawbacks that would be harder to manage.

since my solo401k would be a one-time rollover, all pretax, it won't get comingled with my current company-401k which i am thinking will be a roth401k b/c of a strong possibility that my family and i will immigrate to canada and it sounds like roth is the way to go.

[kenmoremmm]

this article piqued my interest:
https://www.biggerpockets.com/member-blogs/2810/21298-solo-401k-advantages