What is the maximum loan that can be taken from a Solo 401(k) account?
Generally, a loan can be taken from a 401(k) account for no more than $50,000 or 50% of the current vested account balance (whichever is less).  Please see Retirement Plans FAQs Regarding Loans at IRS.gov for more information.
How can an individual convert a traditional IRA to a Roth IRA?
A traditional IRA can be converted to a Roth IRA by:
  • Rollover – A distribution from a traditional IRA can be contributed to a Roth IRA within 60 days after distribution.
  • Trustee-to-trustee transfer – The financial institution holding the traditional IRA assets will provide directions on how to transfer those assets to a Roth IRA with another financial institution.
  • Same trustee transfer – As with the trustee-to-trustee transfer, the financial institution holding the traditional IRA assets will provide directions on how to transfer those assets to a Roth IRA. In this case, things should be simpler because the transfer occurs within the same financial institution.
A conversion results in taxation of any untaxed amounts in the traditional IRA. Also, the conversion is reported on Form 8606, Nondeductible IRAs.
How do I initiate a cash transfer to our platform using the paper Incoming Transfer Form?
To initiate a transfer of cash to your account with us, please complete the Incoming Transfer Form and select either Option A) Complete Transfer or Option B) Partial Transfer and select Cash.  Please enter the amount of cash you would like to transfer in the line beside the Cash option. If selecting a “Complete Transfer”, please note that we cannot hold publicly traded stock, bonds, or mutual funds. This means that all assets must be liquidated prior to submitting the request. Incoming Transfer Forms must be sent to us so that we can execute the document and include a Letter of Acceptance with our submission to your current custodian. Sending this form directly to them without our signature or letter of acceptance will result in the rejection of your transfer request. This form can be sent to us via fax or email (if the resigning custodian accepts faxed transfer requests) or mail (required if the resigning custodian requires original transfer requests).
Do you require a medallion signature guarantee on outgoing transfer requests?
We only require a medallion signature guarantee on outgoing transfer requests that are faxed to us. If the originals are sent by mail, we do not require a medallion signature guarantee.
What is the difference between an indirect rollover and a direct rollover?
A direct rollover is a direct movement of assets from an eligible retirement plan to an IRA or another eligible retirement plan, or from an IRA to an eligible retirement plan, in which the individual does not take constructive receipt of the assets. An indirect rollover is a distribution of IRA or eligible retirement plan assets to an individual (individual takes receipt of the assets) that within 60 days is rolled over to the same type of IRA or to another eligible retirement plan. The amount sent to the new financial institution must be the same amount distributed from the old financial institution. This means that if funds were withheld for taxes, the amount withheld must be made up for by the client. Funds must be sent to the new financial institution within 60 days of constructive receipt of the funds from the old financial institution.
How is a transfer different from a rollover?
A transfer is a direct, nonreportable movement of assets, generally between two IRAs of the same type. A rollover is a reportable movement of assets between IRAs, between IRAs and eligible retirement plans, or between eligible retirement plans. Please note that as of 2015, the IRS has issued limitations on the number of IRA-to-IRA Rollovers. Only one IRA-to-IRA rollover can be done per 12-month period. Please see IRA One Rollover Per Year Rule for additional information regarding this change.
What is a transfer?
A transfer is a direct movement of assets, generally between two IRAs of the same type (i.e., Traditional IRA to Traditional IRA, Roth IRA to Roth IRA, etc.) from one financial institution to another in which the account owner does not take constructive receipt of the assets.
If I hold property in my IRA, can I use it?
No. You or any disqualified person may not have any personal use or benefit of the property while it is held in your IRA account. The property is to be purchased for investment purposes only.
What are the Consequences of a Prohibited Transaction?
If an IRA holder is found to have engaged in a prohibited transaction under Internal Revenue Code Sections 4975 or 408 with IRA funds, it will result in a “deemed distribution” of the IRA. The taxes and penalties are severe and are applicable to all of the IRAs assets on the first day of the year in which the prohibited transaction occurred. If this deemed “distribution” occurs, it will be subject to ordinary income tax and, if you were under the age of 59 1/2 at that time, a ten (10%) percent excise tax on premature distributions may also be assessed. In addition, if the “prohibited transaction” is not corrected within the taxable period, Internal Revenue Code Section 4975(b) imposes a tax equal to 100 percent of the amount involved.
What is a Prohibited Transaction?
The Internal Revenue Code Section 4975 defines a prohibited transaction as any improper use of your retirement account. Additionally, a transaction between your IRA account and a disqualified person is a prohibited transaction. Disqualified Persons are defined to be the account owner, other fiduciaries, certain family members (lineal descendants and spouses of lineal descendants), and businesses under the account owners or disqualified person’s control. Please review the code for specific information and definitions. Other useful resources are the IRS Publications 560 and 590.
What is a disqualified person?
Generally, a “disqualified person” includes, but is not limited to:
  • Yourself
  • Your lineal ascendants and descendants
  • The spouse of a lineal descendant
  • Your spouse
  • Any entity that is owned 50% or more by disqualified persons
  • An entity that is controlled 50% or more by disqualified persons
Can my account invest with other partners, including myself?
Yes, your IRA can invest with other partners and yourself individually. However, it is important to consult legal counsel in these situations to observe formalities and rules that may be associated with that investment.
Will there be penalties for transferring my assets?
No. Your IRA funds are rolled over from your existing IRA account to a new IRA. Your funds remain in a retirement setting and will not result in any early withdrawal fees.