Can I use my Solo 401(k) instead of an SDIRA for the next land buy in Oklahoma

The vehicle choice matters here, and you have the right instinct about the participant loan.

The mechanism you are describing is real: Solo 401(k) plans that permit participant loans let you borrow up to 50% of the vested balance or $50,000, whichever is less, at terms set by the plan document, and that loan lands in your personal hands to use however you want, including purchasing land. You are not triggering UBIT because the loan is to you personally, not to the plan, and the plan itself is not borrowing. The SDIRA route with non-recourse financing is a different structure entirely, and as you noted, the lender pool for non-recourse on bare ground is thin and the pricing reflects that scarcity.

The assumption doing the most work in your framing is that the participant loan solves the carrying cost problem. It does, but only if you can service the loan repayment from outside the plan. Participant loans require scheduled repayments, typically quarterly or per the plan document, back into the 401(k) with interest. If your GC income has dried up or is irregular, that repayment schedule creates a personal cash obligation that exists regardless of what the land is doing. Missing repayments converts the outstanding balance to a taxable deemed distribution, with a 10% penalty if you are under 59.5.

The risk you did not mention is plan disqualification exposure. Solo 401(k) plans require ongoing compliance, including the plan document staying current and, depending on the balance, Form 5500-EZ filings. A solo plan that has been sitting since the S-corp days may need a review before you transact inside it. A tax professional or ERISA attorney needs to confirm the plan document permits alternative asset investment and participant loans before you move. Confirm current IRS loan limits and terms in writing with your plan administrator, as the specifics can change.

What is the current state of the plan document, and has it been amended recently?

Your Solo 401(k) instinct on this makes sense, and the guide content actually calls this out directly: a Solo 401(k) is generally exempt from the unrelated debt-financed income tax that hits an SDIRA when you borrow. That alone is a meaningful difference when the asset produces no rent to absorb a UBIT bill.

On the participant loan: the IRS allows you to borrow the lesser of $50,000 or 50% of your vested balance. With $60k sitting in there, your ceiling is $30,000, not $50,000, because the 50% cap applies first. The loan has to be repaid within five years on a roughly level amortization schedule, and the repayments come from your personal funds, not from the account. On bare land with no income, that repayment has to come out of your own pocket, so the cash flow picture still requires planning even if the UBIT problem goes away.

The SDIRA non-recourse route you described is the alternative, and you are right that lenders willing to do non-recourse on raw land are scarce and the terms are typically worse than conventional financing. The guide flags that all IRA borrowing must be non-recourse, meaning no personal guarantee. A Solo 401(k) participant loan is different because it runs to you personally as the participant, not to the plan itself.

One thing worth confirming with a tax professional: whether the specific way your Solo 401(k) plan document is written allows real estate as an investment. Not all plan documents do, even when the account type technically permits it. That document language is the actual governing rule, not the general IRS framework.

Everything here is a starting point. A CPA or ERISA attorney familiar with self-directed retirement accounts should review the plan document and the loan mechanics before you commit.

What does your current plan document say about alternative asset classes?