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EIN on K-1 for Solo 401(k)s

What EIN number should my investment sponsor use on my K-1 for an investment in my IRA or Solo 401(k)? There is a lot of confusion on this right now on the part of plan owners, and many investment sponsors.


The new rules on this stem from the Federal Government's attempt to curb illicit activity. The watchdog group of the US Treasury, FINCEN has a new set of rules for registering entities to catch bad actors. The rules for K-1s have also changed.


There are two issues to consider here. One is the issue of who will be taxed, but there also is the issue of who owns the entity that owns the investment. The new K-1 Form is looking at both. It used to be that the K-1 only recorded the Social Security number of the owner if they were an individual, or the EIN number if the owner is an entity. If the entity was a disregarded entity for tax purposes, it didn't matter. Now, it does matter. If your Social Security Number is recorded on Line E and you don't like that, don't worry. Your disregarded entity name and number is also recorded on line H2 if it is filled out correctly. This will show who is responsible for the income/gains and losses, as well as notifying the US Government of who is ultimately involved in the investment activity. It's ok, they want you to be involved. They don't want bad guys involved. The IRS isn't trying to tax you, FINCEN is trying to catch you if you're bad.



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