How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Mark Taylor Your Own Question
Mark Taylor
Mark Taylor, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2044
Experience:  Certified Public Accountant
Type Your Tax Question Here...
Mark Taylor is online now
A new question is answered every 9 seconds

I recently established a solo 401k and want to take a loan

Customer Question

I recently established a solo 401k and want to take a loan out. I want to pay off a mortgage on my principle residence which my brother and I are both on (He co signed original loan application and closing docs). 50 k will come from solo 401k loan plus 23 k will come from personal savings and checking accounts from other sources to payoff the Mortgage/Bank My brother has agreed to sign off the deed only after I pay off the mortgage and receive the discharge documents. My question. Can I amortize this loan from my solo 401k OVER 15 YEARS rather than the normal FIVE? In other words, for tax purposes, WILL THE IRS CONSIDER this transaction as a PURCHASE on a PRIMARY RESIDENCE? I know that I consider it a purchase on my primary residence, as I am currently living in the property. 15 year payback would work far better for me than the 5.
Submitted: 1 year ago.
Category: Tax
Expert:  Mark Taylor replied 1 year ago.

Unfortunately from your description it sounds like you would be stuck with 5 years. The is an exception for a longer payback period if you are purchasing your primary residence. The problem that I see is that you already own your personal residence. Would obtaining a mortgage in your name be an option. This would give you the option for a 15 year payback and a tax deduction (which may or may not be beneficial for you). If you itemize you would benefit from the mortgage interest and property taxes.

I hope this helps. Please let me know if you have any other questions or need clarification.