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Integrated SEP - Compensation

Guest JD Colville

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Guest JD Colville

It has recently been brought to my attention that under certain very limited circumstances, an individual in a SEP can be allocated more than $24,000 (15% X $160,000) for 1999. Supposedly, this is because individual compensation for purposes of the 15% limitation is not subject to the 401(a)(17) limit of $160,000. My question is whether for purposes of the integrated allocation of the contribution, the individual's compensation is limited to $160,000 or whether the individual's total compensation can be used? If so, the allocation would be further skewed to the HC. I am assuming that all of the other requirements relating to SEP's, including the deduction limit of 15% of total compensation are met. Thanks in advance for any guidance.

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