THE SELF-DIRECTED PLAN FOR BUSINESSES, SELF-EMPLOYED INDIVIDUALS, AND MORE.

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1 SOLO 401(K) OVERVIEW THE SELF-DIRECTED PLAN FOR BUSINESSES, SELF-EMPLOYED INDIVIDUALS, AND MORE. The Solo 401(k) works much the same as traditional 401(k) plans offered by large companies, as well as SEP IRAs designed for the self-employed. Unlike other retirement plans, an individual 401(k) is strictly for sole proprietors who have no employees (although your spouse may contribute if he or she earns income from your business). The individual 401(k) comes in both a traditional and Roth version, just like IRAs. With the traditional individual 401(k), you put away money on a pre-tax basis and it grows tax-deferred. Your money is taxed when you withdraw it, in a future that may well include higher tax rates. If you opt for the Roth 401(k), you put in after-tax dollars and your money grows tax-free, which means it is not taxed upon withdrawal. You can split your contributions between the two types of accounts. HOW DOES IT WORK? Step 1 Step 2 Step 3 Step 4 Step 5 Establish LLC (if necessary) Solo 401(k) Opened at Provident Account Funded (via old 401(k), Traditional IRA, etc.) Personal Loan (if necessary) Investments Made ACCESS YOUR RETIREMENT FUNDS TO MAKE ALTERNATIVE INVESTMENTS WITHOUT TAX PENALTIES. CALL (888) TODAY TO FIND OUT HOW! WHY PROVIDENT? Provident Trust Group is a simple, safe, and secure way for individuals to take control of their financial future. Once your Provident account is established, you can immediately begin the process of investing in both traditional and non-traditional opportunities such as real estate, notes, LLCs, private placements, tax liens, and more! Our team of industry professionals provides a broad spectrum of expertise in administering our clients investment portfolios with an emphasis on security, privacy, and transparency. We make IRS Code compliance our utmost priority, thereby providing our clients with peace of mind.

2 SOLO 401(K) FEATURES High Contribution Limits: ($52,000 or $57,500 if over the age of 50): While an IRA only allows a $5,500 contribution limit (with a $1,000 additional catch up contribution for those over age 50), the Solo 401(k) annual contribution limit is $52,000 for 2014 with an additional $5,500 catch up contribution for those over age 50. In addition, if your spouse generates compensation from the business, he or she can also make high contributions to the plan. A World of Investment Opportunities: With a Solo 401(k) plan, you will be able to invest in almost any type of investment opportunity that you discover, including real estate (rentals, foreclosures, raw land, tax liens, etc.), private businesses, precious metals, hard money and peer-to-peer lending; your only limit is your imagination. The income and gains from these investments will flow back into your Solo 401(k) plan tax-free. Loan Feature: While an IRA doesn t offer participants a loan feature, the Solo 401(k) allows participants to borrow up to $50,000 or 50% of their account value (whichever is less) for any purpose at a low interest rate (Prime which is 3.25% as of February 1, 2014). This gives a Solo 401(k) plan participant the ability to access up to $50,000 to use for any purpose, including paying personal debt or funding a business. Flexible Contribution Options: Contributions to a Solo 401(k) plan are completely discretionary. You always have the option to try and contribute as much as legally possible, but you also have the option of reducing or even suspending plan contributions if necessary. In other words, you have the ability to make contributions to your Solo 401(k) plan up to an aggregate amount of $50,000 if you are under the age of 50 but are not required to do so. Roth-Type Contributions: With IRAs, those who earn high incomes are disallowed from contributing to a Roth IRA or converting their IRA to a Roth IRA. The Solo 401(k) plan contains a built-in Roth sub account which can be contributed to without any income restrictions. With a Roth Solo 401(k) sub account, you can make Roth-type contributions while having the ability to make significantly greater contributions than with an IRA. Cost-Effective Administration: In general, the Solo 401(k) plan is easy to operate. There is typically no annual filing requirement unless your Solo 401(k) plan exceeds $250,000 in assets, in which you will need to file a short information return with the IRS (Form 5500-EZ). Exemption from UDFI: When an IRA buys real estate that is leveraged with mortgage financing it creates unrelated debt financed income (UDFI) a type of unrelated business taxable income, also known as UBTI or UBIT. On which taxes must be paid at an approximate rate of 35%. With a Solo 401(k) plan, you can use leverage without being subject to the UDFI rules and UBTI tax. This exemption provides significant tax advantages for using a Solo 401(k) plan versus an IRA to purchase real estate. Retirement Saving Consolidation through Rollovers: A Solo 401(k) plan can accept rollovers of funds from another retirement savings vehicle, such as an IRA, a SEP, or a previous employer s 401(k) plan. Thus, you can directly roll over your IRA or qualified plan funds to your new 401(k) plan for investment or loan purposes. The exception is Roth IRA funds which cannot be rolled into a Solo 401(k) plan. Asset Protection: By having and maintaining a Solo 401(k) plan, the people to whom you owe money as a result of normal debt, bankruptcy or a civil court judgment will likely not be able to reach your Solo 401(k) assets to satisfy the debt. However, Solo 401(k) plan assets are not federally protected from divorce settlements or federal tax liens. With only the exception of Michigan and Rhode Island, most states will afford Solo 401(k) plans full protection from creditors outside of the bankruptcy context.

3 WHY WOULD YOU USE A SOLO(K)? 1. Reach Your Maximum Contribution Amount Quicker: A Solo 401(k) includes both an employee and profit sharing contribution option, whereas a Traditional IRA has a very low annual contribution limit. Under the 2015 Solo 401(k) contribution rules, a plan participant under the age of 50 can make a maximum employee deferral contribution in the amount of $18,000. That amount can be made pre-tax or after-tax (Roth). On the profit sharing side, the business can make a 25% (20% in the case of a sole proprietorship or single member LLC) contribution up to a combined maximum, including the employee deferral, of $52,000 an increase of $1,000 from For plan participants over the age of 50, an individual can make a maximum employee deferral contribution in the amount of $23,000. That amount can be made pre-tax or after-tax (Roth). On the profit sharing side, the business can make a 25% (20% in the case of a sole proprietorship or single member LLC) profit sharing contribution up to a combined maximum, including the employee deferral, of $57,500 an increase of $1,000 from A Traditional Self-Directed IRA would only allow an individual with earned income during the year to contribute up to $5,500, or $6,500 if the individual is over the age of 50. For example, Joe, who is 60 years old, owns 100% of an S Corporation with no full-time employees. Joe earned $100,000 in self-employment W-2 wages for If Joe had a Solo 401(k) established for 2014, he would be able to defer approximately $48,000 for 2014 (a $23,000 employee deferral that can be pre-tax or Roth (aftertax), and 25% of his compensation, giving him $48,000 for the year). Whereas, if Joe established a Traditional Self-Directed IRA, Joe would only be able to defer approximately $6,500 for Roth Feature: A Solo 401(k) plan can be made in a pre-tax or Roth (after-tax) format. In the case of a Traditional Self-Directed IRA, contributions can only be made in pre-tax format. In addition, a contribution of $17,500 ($23,000 if the plan participant is over the age of 50) can be made to a Solo 401(k) Roth account. 3. Tax-Free Loan Option: With a Solo 401(k) plan you can borrow the lesser of, 50% of your account value or $50,000. The loan can be used for any purpose. With a Traditional Self-Directed IRA, the IRA holder is not permitted to borrow even $1 from the IRA without triggering a prohibited transaction. 4. Use Non-Recourse Leverage and Pay No Tax: With a Solo 401(k), you can make a real estate investment using non-recourse funds without triggering the unrelated debt financed income rules and unrelated business taxable income (UBTI or UBIT) tax (IRC 514). However, the non-recourse leverage exception found in IRC 514 is only applicable to 401(k) qualified retirement plans and does not apply to IRAs. In other words, using a Self-Directed SEP IRA to make a real-estate investment (Self-Directed Real Estate IRA) involving nonrecourse financing would trigger the UBTI tax. 5. Better Creditor Protection: A Solo 401(k) offers greater creditor protection than a Traditional IRA. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 generally protects all 401(k) plan assets from creditor attacks in a bankruptcy proceeding. In addition, most states offer greater creditor protection for a Solo 401(k)-qualified retirement plan than a Traditional Self-Directed IRA outside of bankruptcy. CALL (888) TODAY TO GET STARTED!

4 THE SOLO 401(K) PLAN ADVANTAGE The Solo 401(k) is a perfect structure for any self-employed business owner seeking to leverage their retirement to its full potential. From providing the opportunity for a self-employed business owner to take a personal loan, to providing flexible contribution options (such as Roth contributions), the Solo 401(k) utilizes a number of features other account types simply cannot match. Traditional IRA SEP IRA Solo 401(k) Plan 2015 Annual Contribution $5,500 $53,000 (25% of employee compensation; 20% for self-employed) $18, Catch-up Contribution $1,000 No $6, Employer Plan Contribution No No $35,000 Loan Availability No No Yes (50% of account value up to $50,000) Financing Yes (Non-recourse financing subject to tax) Yes (Non-recourse financing subject to tax) Yes (Generally no tax on the non-recourse financing) Roth Feature Availability No No Yes (No income restrictions)

5 A Solo 401(k) loan is permitted at any time using the accumulated balance of the Solo 401(k) as collateral for the loan. A Solo 401(k) participant can borrow up to either $50,000 or 50% of their account value, whichever is less. This loan has to be repaid over an amortization schedule of 5 years or less with payment frequency no less than quarterly. The interest rate must be set at a reasonable rate of interest, generally interpreted as prime rate + 1%. As of February 1, 2013, the prime rate is 3.25%, which means participant loans may be set at very reasonable interest rate. The interest rate is fixed based on the prime rate at the time of the loan application. WHEN CAN A PARTICIPANT LOAN BE USEFUL? The Solo 401(k) plan is a perfect structure for any self-employed business owner seeking immediate funds for their business or to help pay personal expenses. Solo 401(k) participants can borrow up to either $50,000 or 50% of their account value, whichever is less, to help finance or operate their business. OTHER USEFUL WAYS OF USING THE PARTICIPANT LOAN FEATURE: Lend the funds to a third party who will pay a higher interest rate Invest in a real estate project that offers a higher rate of return than the low interest rate you must pay Consolidate debt Pay for college expenses Pay for unexpected emergencies Avoid distribution penalties and use up to $50,000 immediately with no restrictions Invest in a new franchise or business SOLO 401(K) LOAN EXPLAINED Make any alternative investment that will generate a higher rate of return than the low interest rate imposed on you, such as tax liens, private placements, or mortgage pools Invest in a transaction that would otherwise be a prohibited transaction under Internal Revenue Code Section 4975 Have quick, easy, and cheap access to a $50,000 loan to be used for any purpose

6 Solo(k) Process How Does the Process Work? Entity #1 (S-Corp, C-Corp, LLC) 1. Entity Establishes a Solo(k) Plan The Solo(k) is established at Provident Trust Group. New Contribution 1 2. Solo(k) Plan is Funded Funds are rolled over from existing retirement plans (old 401(k), 457(b), Traditional IRA, etc.) or new contributions are made to the Solo(k) Plan. Old 401(k) 2 3. Solo(k) LLC is Established Old 457(b) Solo(k) Plan The client directs Provident to send funds into their Solo(k) LLC as an investment from their Solo(k) account. 4. LLC Purchases Investments Traditional IRA The Solo(k) LLC makes investments as it sees fit. Earnings from the investments are deposited into the LLC s checking account. 3 Did You Know? Solo(k) LLC (Entity #2) Using a Solo(k) Plan, you can borrow 50% of your account value up to a maximum of $50,000 as a 5-year personal loan. ROI 4 ROI Loan payments are made via check, ACH, or wire to their Solo(k) account at Provident. Investment (Property #1) Investment (Property #2) 8880 W. Sunset Rd., Ste 250, Las Vegas, NV Toll Free: (888) Fax: (702) trustprovident.com