cpc0506 Posted October 31, 2014 Share Posted October 31, 2014 Company A was a partnership (2 partners, Employee A and Employee B in 2014) which sponsors a SEP. Midway through 2014 the partnership dissolves. Employee B has started a new company, Company B, (100% ownership) after the dissolution of Company A. Can Company B adopt a 401(k) Plan for 2014? If so, does the contribution made under Company A's SEP have any effect on what Employee B can receive under the new 401k plan? Link to comment Share on other sites More sharing options...
Bird Posted October 31, 2014 Share Posted October 31, 2014 Yes, can start a plan. SEP has no effect on B's contributions in new plan, assuming B did not own 80% of the partnership and the two entities are not an affiliated service group. Ed Snyder Link to comment Share on other sites More sharing options...
cpc0506 Posted October 31, 2014 Author Share Posted October 31, 2014 What if the plan of Company A was a Simple-IRA plan? Does this change your answer? The orginal ownership of Company A was split 50-50 between Employee A and Employee B. Link to comment Share on other sites More sharing options...
Lou S. Posted October 31, 2014 Share Posted October 31, 2014 As long as he didn't have more than 50% interest in A you are fine for 415 415(h)50 Percent Control .— For purposes of applying subsections (b) and © of section 414 to this section, the phrase “more than 50 percent” shall be substituted for the phrase “at least 80 percent” each place it appears in section 1563(a)(1). Link to comment Share on other sites More sharing options...
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