[strohm]

1. Can I use rental income to contribute to my Solo 401k?
2. If I pay myself a salary to manage my rental properties,
Can some of that salary be contributed to my Solo 401k?
3. What’s the 402(g) limit for 2006?
4. Can 2006 contributions be made up to April 15, 2007.

[AtlantaTaxExpert]

1) Not normally. IRAs and 401Ks can only be funded from earned income or self-employment income. The only way rental income can be used is if you have taken the step of establishing your rental activities as a business.

2) To pay yourself a salary, you would have to put the rental activities under either a partnership or a corporation business structure.

3) Not sure; you can find out at Internal Revenue Service.

4) Normally, yes, if the 402(g) has already been established.

[jboyle2]

To contribute to a Solo 401k earned income is required. Passive income like rental income from real estate does not qualify. A way to determine if you have self-employment income that qualifies to make a contribution to a Solo 401k is to ask yourself if you performed services. For example did you fix the toilet or put on a new roof that resulted in being compensated by an outside party. In other words, if your tenants paid you as part of the rent payment, it would still not qualify as non passive income. Www.mysolo401k.net