If your Solo 401k special purpose LLC purchases an investment such as real estate, you may be required to complete form W-9.
Form W-9 is used by both individuals and entities to provide their taxpayer identification number (TIN or EIN) to entities who will pay them during the tax year.
Entities will use form W-9 for accounting purposes, but generally don't send a copy of the form to the IRS. The information on form W-9 is then used to prepare IRS form 1099-MISC at the end of the year to document payments.
If your Solo 401k special purpose LLC completes this form, and receives form 1099-MISC, it doesn't mean you have to pay any taxes, but you may still need to complete a tax return for your entity. The tax return would be informational only as your original EIN (employer identification number) for your Solo 401k special purpose LLC is connected to and owned by a tax-deferred or tax-exempt entity (your retirement account).
Step by Step Guide
Line 1: Enter your LLC Name
Note: This is not a general purpose business LLC. This guide is for 401k LLCs only. Please list the name of your Special Purpose investment LLC
Line 2: Leave blank
Line 3: Tax classification - Check other (and see instructions below)
You'll indicate that this is a "Tax -exempt retirement plan" because the LLC is solely owned by your Solo 401k.
Line 4: Enter exempt payee code of 1
Note: Your Special Purpose LLC is solely owned by your Solo 401k, thus falling under custodial account under section 403(b)(7)
Line 5 & 6: Enter your Address, City, State and Zip code
Part 1 (TIN) — Enter the EIN for your LLC
Part 2 (Certification) -- Sign and Date
Disclaimer: We are not your Attorney, CPA, Tax Advisor, Tax Preparer, Investment Advisor, or Financial Planner. None of the information we publish or distribute is intended or allowed to be used as a replacement for the professional advice you would receive from any of those previously mentioned advisors. Please consult your tax professional for questions regarding completing IRS form W-9.