If it’s time to start your required minimum distribution (RMD) from the Solo 401k, the easiest thing to do is take the first distribution from cash, or easily liquidatable assets.

If your retirement funds are illiquid and all in real estate, the RMD can still be done.

In this case, you’ll do an in-kind distribution via a grant deed, which means your Solo 401k owns part of the property and you personally own the part that’s been distributed.

This type of RMD is totally acceptable, although not typical and is more complicated than a regular RMD. It is strongly recommended you have a competent attorney and/or tax advisor help you as an appraisal and partial deed transfer will be needed.

It’s very important that you take your RMD payment from your Solo 401k plan. Failure to receive an RMD (or receiving too little of a payment) can result in a 50% excise tax on the amount you were supposed to distribute.

Solo401k.com accountholders have access to our vetted and trained network of great CPAs to help calculate your RMD. If you need a recommendation, send us

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