Dougsbpc Posted March 12, 2018 Share Posted March 12, 2018 Suppose you have a sole proprietor who came up with an Engineering process and had significant schedule C profit for the first two years. The third year he spent all of his time making the idea / process better but had no income for that year and did not even file a Schedule C. In the fourth year, he adopts a defined benefit plan but has not been quite as successful as he was in years 1 and 2. Per the document, the plan can count past compensation if elected. Can the plan count his first 3 years as his average compensation even though he filed no schedule C the third year? He claims he worked harder and longer in year 3 than any other year. Thanks. Link to comment Share on other sites More sharing options...
CuseFan Posted March 12, 2018 Share Posted March 12, 2018 For an employee with a break in service I believe you ignore the break, so you'd count years 1, 2 and 4. I don't know if having no profit in year 3 could be considered a break, where you could similar, but I don't see why year 3 can't go into the 3-year average as a zero. Kenneth M. Prell, CEBS, ERPA Vice President, BPAS Actuarial & Pension Services kprell@bpas.com Link to comment Share on other sites More sharing options...
Mike Preston Posted March 12, 2018 Share Posted March 12, 2018 No break. Must go into the 3-year average as a zero. Link to comment Share on other sites More sharing options...
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