Solo 401k Podcast - Unrelated Business Income Tax (UBIT) & Unrelated Debt-Financed Income Tax (UDFI)

[@PreppedandPolished]

Looking good George!

[@mysolo401kfinancial3]

Thank you for your kind words!

[@thuy-tienle860]

If we invest in a C corp that doesn't provide a 1099-INT or 1099-DIV but a 1099-MISC, would we still be exempt from UBIT because of the fact that we invested in a C corp or does the UBIT depends more on the the tax form that the C corp provides us? Thank you.

[@mysolo401kfinancial3]

If you invest your Solo 401k funds in the stock of a c corp the corporation will not issue a 1099-MISC on account of the investment - a -1099-MISC is issued to contractors and not stockholders.

[@thuy-tienle860]

It's a C corp in alternative investments, not stocks, & they issue 1099-Misc to their investors. Since this is how they're doing it, would the investment be subjected to UBIT? Thank you.

[@mysolo401kfinancial3]

It would be best to review with your tax advisor but generally income that is attributable to an equity investment of a Solo 401k in a C-corporation is not subject to UBIT.

[@empathyismoney]

Where do I find the "fix it" guide for a 401k?

[@mysolo401kfinancial3]

www.irs.gov/retirement-plans/401k-plan-fix-it-guide