Self Directed Investor Talk: Alternative Asset Investing Through Self-directed Ira's & Solo 401k's

The Big Idea An old IRS Revenue Ruling makes Solo 401k's set up by banks, brokerages and self directed IRA custodians just as risky as IRA's in the event of a prohibited transaction... and it does not need to be that way.  Pay close attention for the problem and the solution. Points To Ponder 401(k) plans (including Solo 401k's) can be set up as "Custodial" or "Trust" plans "Custodial" plans are usually those set up by financial companies, including Self Directed IRA custodians "Trust" plans are usually those where the employer/business owner directly manages the 401k IRS Revenue Ruling 71-153, in effect, says that Custodial-type 401k plans are not able to be "fixed" if a prohibited transaction occurs, but that Trust-type plans can be corrected This means that Custodial 401k plans are just as susceptible to the horrible risk of prohibited transactions as IRA's... and the risk there is catastrophically significant If you have a Solo 401k plan, your action items are: Determine whether your plan is Custodia