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Attached is Publication 560 (2022), Retirement Plans for Small Business which gets into the details of calculating income for self-employed individuals. There is a worksheet titled Deduction Worksheet for Self-Employed with Step 1 is: Enter your net profit from Schedule C (Form 1040), line 31; Schedule F (Form 1040), line 34;* or Schedule K-1 (Form 1065),* box 14, code A.** For information on other income included in net profit from self-employment, see the Instructions for Schedule SE (Form 1040) Note that Schedule E is not listed along with the other schedules, and many of income items on Schedule have to do with passive income. It is worth looking at the Schedule SE instructions where there are long lists of what is and is not included in earnings from self-employment. If you distill all of this down, any income on Schedule E that is considered as income from self-employment for personal services would be reported on the individual's K-1. Any income reported solely on Schedule E is insufficient to determine if that income should be considered by a retirement plan. If the Schedule E income does not flow through to Schedule K-1 or to Schedule SE, then it is not income from self-employment and should not be used for retirement plan purposes. If the client believes it should be included, or the TPA believes it should be included, then the burden of proof is on them. p560.pdf

Wow that's a good question. I would assume absent specific guidance the 2022 audit would be required to be attached to the 2023 return since the 2022 audit is just being deferred under the rule. That is it is still required. And the audit relief for plans under 100 accounts is applicable to 2023 and does not go back to 2022 as far as I can tell.

Technically, it's an employer contribution. Move it to the forfeiture account, if recordkeeper will let you. If entitled to other employer contributions, move to another source.

It takes 2 or more taxpayers to have a partnership so he cannot have a 1 man LLC taxed as a partnership. If there is no SE income listed in box 14 the income is not SE earnings and cannot be used for plan comp.

Provided each plan can satisfy coverage without the need to aggregate then you can test separately for nondiscrimination.

that is my understanding

Here’s the rule for delaying, not excusing, an independent qualified public accountant’s report. Observe the several mentions about both plan years. 29 C.F.R. § 2520.104-50(b) https://www.ecfr.gov/current/title-29/part-2520/section-2520.104-50#p-2520.104-50(b). Even if a later plan year begins with fewer than 100 counted participants, consider that there are several other conditions for excusing an independent qualified public accountant’s audit of the plan’s financial statements. 29 C.F.R. § 2520.104-46(b) https://www.ecfr.gov/current/title-29/part-2520/section-2520.104-46#p-2520.104-46(b).

Company B can have it's own plan. They are a controlled group so you need test everything together and you have one 401(a)(17) limit and one 415 limit if you have any employees who wide up working for both company A & B. I think you may also have one 401(k) test, but I could be wrong on that. So yes but some extra testing.

The route that the corrective contribution follows into the plan is unimportant. What matters is that, from whatever source the contribution comes, it is classified as an employer nonelective contribution and is subject to the rules that apply to contributions of that type. If the recordkeeper remits funds directly to the plan, the transaction will be constructively a payment to the employer followed by the employer's contribution to the the plan. The paper trail is simpler, however, if the recordkeeper pays the employer and the employer pays the plan.

There's nothing wrong with letting the new group of employees participate immediately without regard to the normal service requirement. Eligibility requirements don't have to be uniform (with the obvious caveat that they can't result in discriminatory coverage).

Schedule E income is supplemental income, and I'm pretty sure that it is not earned income. Dr. Google confirms that but there is no cite. If it is not earned income it is not plan income. I generally fall back on "is it subject to self-employment tax" to confirm whether it is earned income or not.

was it a stock (equity) acquisition or asset acquisition? If a stock acquisition - you have a classic successor plan scenario, and no, there would be no distributable event.