Vinny

Based upon this: "26 CFR § 1.401-10 - Definitions relating to plans covering self-employed individuals. | CFR | US Law | LII / Legal Information Institute (cornell.edu) (2) If a self-employed individual is engaged in more than one trade or business, each such trade or business shall be considered a separate employer for purposes of applying the provisions of sections 401 through 404 to such individual. Thus, if a qualified plan is established for one trade or business but not the others, the individual will be considered an employee only if he received earned income with respect to such trade or business and only the amount of such earned income derived from that trade or business shall be taken into account for purposes of the qualified plan." Does the below follow for a Solo 401(k) for an individual with two Schedule C's, one with a profit and the other with a loss (and no other income)? Do not net the two for purposes of profit but do net the two for purposes of calculating the 1/2 Self-Employment tax? I have done extensive internet searches to try to get a definitive answer but this forum is the only place I've seen it addressed. Thanks Vinny

Any of the above people who participated in the above discussion still here? If so, do you have any updates to what you stated above? Anyone else have any updates? Thanks!

I believe that for a sole proprietor the plan is only in the sole proprietor's name, with no reference to any business(es) that the sold proprietor has.

Assume an individual operates two separate, distinct Schedule C businesses as a sole proprietor. One business has a net profit of $50,000 while the other as a net loss of $5,000. The line for Schedule C on the 1040 would reflect the combined $45,000 as would the computation for the self-employment taxes. However, what is "earnings from self-employment"? Is it only the $50,000 from the profitable business? Or, the combined $45,000? And, if the $50,000, what is the "Allowable....deduction for one-half of your self-employment tax"? Would it be the actual self-employment tax as reflected on the 1040? Or, would it be the theoretical (higher) amount that would have been deducted if the self-employment income was only $50,000 (and not reduced by the $5,000 loss)? Thanks Vinny