Question 1

What is a Series Special Purpose LLC for a Self Directed 401(K)?

Accepted Answer

A Series Special Purpose LLC for a Self Directed 401(K) is a limited liability company owned by your Solo 401(K) plan that can establish protected series, giving the plan checkbook control while each property or investment sits in its own liability compartment. Our attorneys at AmeriLawyer, a licensed law firm, draft the plan provisions and the series framework together.

Question 2

Who qualifies for a Self Directed Solo 401(K)?

Accepted Answer

A Solo 401(K) is available to self employed individuals and owner only businesses with no full time common law employees other than a spouse. Freelancers, consultants, realtors, and independent contractors commonly qualify. Our attorneys confirm your eligibility and review your business structure before the plan and the LLC are established.

Question 3

Why use a 401(K) instead of an IRA for checkbook control?

Accepted Answer

Three advantages. A Solo 401(K) needs no outside custodian because you serve as trustee, contribution limits are substantially higher than IRA limits, and leveraged real estate generally escapes unrelated debt financed income tax under Section 514(c)(9) of the Internal Revenue Code, an exemption IRAs do not receive. Our attorneys help you weigh both paths against your facts.

Question 4

Why add protected series to the 401(K) LLC?

Accepted Answer

Because one lawsuit at one property should never reach the rest of your retirement portfolio. Each series holds one asset behind its own statutory wall, all under a single entity and a single plan. Our attorneys recommend the series structure once the plan holds, or intends to hold, more than one property or venture.

Question 5

How does checkbook control work with a Solo 401(K)?

Accepted Answer

As trustee of your own plan, you direct plan funds into the LLC, the LLC opens its accounts, and you as manager sign for every investment with no custodian approvals and no per transaction fees. Our attorneys document each step so the funding is a proper plan investment rather than a distribution.

Question 6

Do the prohibited transaction rules apply to a 401(K) LLC?

Accepted Answer

Yes. Section 4975 applies to qualified plans just as it does to IRAs, so neither you nor your spouse, parents, children, or entities they control may buy from, sell to, borrow from, or personally use any series asset. Our attorneys brief every client on the disqualified person rules before the first dollar moves.

Question 7

Can the plan's series buy real estate with a mortgage?

Accepted Answer

Yes, with a nonrecourse loan, meaning the lender's only remedy is the property itself and no personal guarantee is permitted. Unlike an IRA, a 401(K) plan generally owes no unrelated debt financed income tax on that leverage under Section 514(c)(9). Our attorneys review each loan's terms so the exemption actually applies.

Question 8

How do I set up the complete structure?

Accepted Answer

The sequence is plan first, entity second: adopt or verify a Solo 401(K) plan document that permits alternative investments, then our attorneys file articles with series authority, draft the operating agreement naming the plan as member, obtain EINs, and open the accounts. Each asset then receives its own series designation.

Question 9

Does each series need its own bank account and records?

Accepted Answer

Yes. Every series maintains its own account, books, and title, funded exclusively by plan capital, and the plan maintains its own records above them. Commingling collapses the series walls and can jeopardize the plan's qualified status. Our attorneys deliver a written separation protocol covering the plan, the master LLC, and every series.

Question 10

What tax filings does the structure require?

Accepted Answer

The plan is tax exempt, so the LLC's rental and investment income generally flows in untaxed. Once total plan assets exceed the IRS threshold, the plan files an annual Form 5500EZ, and any unrelated business income is reported on Form 990T. Our attorneys coordinate the filings with your accountant so nothing is missed.

Question 11

Which states allow the series structure?

Accepted Answer

You need a state with a series statute, and a growing number qualify, including Florida effective July 1, 2026. The location of the properties matters as much as the formation state. Our attorneys select the jurisdiction around your actual holdings and confirm recognition wherever the plan's assets sit.

Question 12

Can each series hold a different type of investment?

Accepted Answer

Yes. One series can hold a rental property, another a private loan, and a third a private company interest, each behind its own wall. That flexibility is the point of the structure. Our attorneys review every intended asset against the plan rules and the Code before the series is designated.

Question 13

Can I take a loan from my Solo 401(K)?

Accepted Answer

Generally yes. A Solo 401(K) may permit participant loans up to the statutory limits, a feature IRAs do not offer at all. The loan comes from the plan, never from the LLC or its series. Our attorneys draft the plan and entity documents so the two never blur, because borrowing from the LLC is prohibited.

Question 14

What happens if I hire employees later?

Accepted Answer

Hiring full time employees changes your plan obligations, because a qualified plan generally cannot exclude eligible employees, and ignoring that rule risks plan disqualification. It does not end the strategy, but it demands attorney attention promptly. Our attorneys review the transition and adjust the plan before the hire creates a problem.

Question 15

Why does this structure require a law firm rather than a filing website?

Accepted Answer

The structure layers a qualified retirement plan, the prohibited transaction rules, and a series statute on top of each other, and an error in any layer can cost the plan its tax status or the assets their walls. Filing websites cannot advise on any of it. AmeriLawyer is a licensed law firm. Email webclerk@amerilawyer.com to speak with an attorney.

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Common Questions About Forming a Series 401(K) LLC

Start a Series 401(K) LLC in Illinois

Business Fundamentals

Preferred

Premium

What's Included on our Service Fee?

Decades Of Filing Experience, Working For You.

We Don't File and Disappear

Attorney Reviewed

Correct Filing Fees

On Time Filing

Amerilawyer Guarantee

All States Covered

Focus on Your Business

Let a Licensed Law Firm Handle Your Filing From Day One.

Select A Framework

Trust HoldingStructure

Holding CompanyStructure

Holding CompanyStructure With Subsidiary

Common Questions About Forming a Series 401(K) LLC

01What is a Series Special Purpose LLC for a Self Directed 401(K)?

02Who qualifies for a Self Directed Solo 401(K)?

03Why use a 401(K) instead of an IRA for checkbook control?

04Why add protected series to the 401(K) LLC?

05How does checkbook control work with a Solo 401(K)?

06Do the prohibited transaction rules apply to a 401(K) LLC?

07Can the plan's series buy real estate with a mortgage?

08How do I set up the complete structure?

09Does each series need its own bank account and records?

10What tax filings does the structure require?

11Which states allow the series structure?

12Can each series hold a different type of investment?

13Can I take a loan from my Solo 401(K)?

14What happens if I hire employees later?

15Why does this structure require a law firm rather than a filing website?