tomf

I apologize for the misunderstanding about partner in the s-corp. Allow me to rephrase the s-corp. arrangement to the other co-owner and I each are the only employees and only owners of the s-corp. Partners should have only been used in describing the general partnership and the s-corp. receives it's income from the general partnership as a partner. Again, I thank you for your assistance.

I greatly appreciate your information and advise. The s-corp. holds 2 shares in the general partnership because there are two of us in the s-corp. The other 7 members of the general partnership each have one share in the partnership. The s-corp. generates 95% of it's income through the partnership, approximately $550,000 and additional income of $20,000 is generated outside of the partnership to the s-corp. I read the IRS publication on retirement plans (I believe form 560) and it did not clearly mention owners of corporations as participants in solo 401ks.

I have a two part question and need advise. I and another highly compensated partner started an s-corp. We have NO employees other than ourselves. We both own 50% of the company so we report the majority of our income on W-2's and the rest of the income is divided equally and reported as profit sharing on K-1's. In addition, the s-corp is a partner in a general partnership. There are 9 partners in the general partnership some are incorporated and some not. The general partnership has NO employees. My partner and I in the s-corp each opened a solo 401k and have been contributing to both. The s-corp as the employer and the two of us as the employees. My first question is, my partner and I, are we allowed to contribute to solo 401ks? Are owners of s-corps who are highly compensated with no employees other than themselves allowed to have this type of retirement plan? My second question is, our corporation allowed to start a retirement plan without including the other partners in the general partnership, I have not asked but the other partners in the general partnership probably have their own retirement plans. I would like to thank you for any time spent on this post. Sincerely, Tomf