George asked 2 years ago
How about these apples??
- Company A owns a significant value of commercial rental real estate. Not a REIT, but large enough to feel like one.
- Company B provides various property management services to Company A.
- Taxpayer is employed by Company B but provides various services to both Company A and Company B.
- Can Taxpayer direct a Solo K (which plan is unrelated to Company A or Company B) to invest in Company A, not to exceed 5% of overall ownership?
- If so, can Taxpayer’s Solo K acquire the 5% membership interest in Company A on a note secured only by the membership interest itself? The note would be paid primarily through cash distributions from Company A on account of the membership interest.
- Any issue if likely payoff period on the note is 10 years? Or if termination of Taxpayer’s employment with Company B triggers a right of Solo K’s membership interest to be acquired by the other members in Company A?
- Pass-through taxation throughout.
Thanks!