Can partner participant write a personal check for discretionary PSP c

[Moe Howard]

Question regarding a partnership's Profit Sharing Plan.

Facts:

a) Only discretionary contributions are made to the PSP.

b) The plan has 8 participants ...(3 are partners & 5 are regular employees).

c) The plan year end is 12/31/00.

d) No contributions are made during year 2000.

e) In January 2001, the contribution $amount for year 2000 is determined ($ 8,500). Also, its allocation among the 8 participants is properly computed ($ 2,000 for each partner and $500 for each regular employee). [3 @ $2000 = $6000 and 5 @ $500 = $2500].

QUESTION (concerning the payment of the contribution).

Can the partnership contribute $2500 to the plan trust in January 2001 for the 5 regular employees .... and then in March 2001 each of the partners write a personal check for $2000 to the plan trust ? (In other words: Can a partner fund his Keogh with a personal check ....or must an employer check be used ?).

Anyone know of a tax code or reg that addresses this issue?

[Erik Read]

Moe - I'm thinking you post these questions just to get us all thinking.

This is terrific - okay - I can see an argument on both sides, and don't know of any specific "regs" that stipulate that a partner cannot fund the plan.

In practice, I would say that if the partner is writing a personal check, it should probably be made out to the partnership, and then the partnership should write a single check to the plan for a clean paper trail.