Digital Investments as Alternative Assets in a Solo 401(k): Premium Domain Names

Published on February 2, 2026

Digital technology has opened the door to a new type of entrepreneurship—and investing opportunities with a self-directed solo 401(k) account. In this article, we look at investing in premium domain names, but first…

What is a solo (k)?
This is a retirement account, similar to a traditional 401(k) plan, but for self-employed business owners who don’t have any employees who meet the long-term, part-time rule associated with these plans (excluding one’s spouse or business partners). You can open a solo 401(k) regardless of your income level or type of entity, so the business could be a side hustle or a full-time enterprise.

The account owner can build up tax-deferred retirement savings but unlike a traditional 401(k) plan, a solo(k) can be self-directed, which allows individuals to include a broad array of alternative asset classes within the plan. Plus, as both the employer and (sole) employee, the investor can make much higher contributions than with an IRA (Traditional and Roth) and in some cases, may contribute more than the SEP IRA limit.

The business of digital investments in premium domains

A growing asset class in the world of digital investments is premium website domains. These investments comprise registering a domain name (a website URL) to resell later at a profit. The opportunities are ample:

• According to the Domain Name Industry Brief’s report for the third quarter of 2025, there were 378.5 million domain name registrations across all top-level domains.
• This represented an increase of 6.8 million registrations compared to the second quarter of 2025.
• Domain name registrations increased by 16.2 million, or 4.5%, year over year.

To be considered a premium domain, the asset is typically a highly brandable term that is short, highly relevant to the industry or company, and is “keyword-rich” (think Zoom.com or Hotels.com); plus, the domain name is or will be in high demand, since online visibility, memorable URLs, and brand equity are, well, at a premium in today’s crowded online world.

Investors purchase these high-value domains as short-term transactions that they will flip relatively quickly or use as longer-term investments to resell as the domain’s value increases. Through investments in premium domains, investors may also become entrepreneurs as they build a business around securing and selling these valuable assets and their solo 401(k) earns passive income.

Some benefits of investing in premium domains

• Passive income: The solo(k) plan earns revenue when the investor resells the domain on a secondary marketplace, through an auction, or via a “for sale” landing page. The solo(k) can also lease the premium domain name to a business for a monthly fee and generate recurring revenue.
• Flexibility: There is no limit to how many domains a business or solo(k) plan can hold, only that the asset must be held for appreciation and eventual resale.
• Monetization opportunities: The investor may set up a placeholder web page or site through the solo 401(k) that displays ads to monetize the domain while waiting for the right time to sell. It is best to do this through an LLC to avoid the account owner from working on behalf of the plan, which constitutes a prohibited transaction.

Beware of these risks

One restriction is that the domain registration and sale must not infringe on existing trademarks, which would make it a prohibited (unlawful) transaction. Instead, use generic or descriptive terms with perceived value.

Another issue to avoid is cybersquatting, which is when someone registers a domain that targets a trademark in bad faith and exploits a brand’s reputation and could be used for phishing scams.

Making the digital investment in a self-directed solo 401(k)

The asset must be titled in the name of the solo(k) (not the account holder’s name), and all purchases, registrations, and sales must be documented in the name of the plan with the plan’s EIN (employer ID number).

The plan maintains control of the digital asset(s). Therefore, to comply with IRS rules about these investments and avoid a prohibited transaction, the account owner cannot make these purchases for personal benefit or for the benefit of disqualified persons, and it must be transacted with a neutral (unrelated) third party.

Be careful about the potential to trigger unrelated business income tax (UBIT) if the investment activity is deemed by the IRS to be an active trade or business instead of a passive investment. See your tax advisor for questions on this.

As with all alternative assets held within self-directed retirement plans, the account owner must establish the fair market value of the premium domains every year for reporting on IRS Form 5498.

Another alternative asset of note: trademarks

Investors can also include digital trademarks within their self-directed IRA or solo 401(k) plan. These assets can grow in value as the brand they are associated with gains market share and brand recognition.

There are a few ways to leverage these business assets (which are intellectual property) with a self-directed IRA or solo 401(k).

• The retirement plan purchases existing trademark rights or portfolios, usually through a specialized exchange or by partnering with owners of intellectual property.
• The plan licenses registered trademarks through a royalty agreement and earns passive income from trademark use.
• The plan invests in a company that has strong trademark portfolios.

If you are new to self-direction as a retirement wealth-building strategy, but know and understand various types of alternative assets, we invite you to contact our helpful team to learn more about the many options and benefits of using a self-directed retirement plan. Connect with us during regular business hours at NewAccounts@NextGenerationTrust.com or 888.857.8058.