415 Aggregation

[Guest merlin]

Dr. A owns 100% of a medical corporation which presently provides anesthesiology services to Hospital H.His medical corporation sposors a profit sahring plan in which Dr. A is the sole participant. As of June 30 he has qualified for a $40,000 allocation for 2002.As of July 1, H's anesthesiology services will be provided by Partnership P. Dr. A will be 1 of 20 equal partners in P and will be immediately eligible for P's ps plan. His partnership income for the rest of 2002 will be sufficient to qualify him for a $40,000 allocation in P's plan. Since he owns less than 50% of P there should be no 415 aggregation,right? Should be a simple question,but doctors and hospitals always give me the shakes.

[mbozek]

The controlled group rules required aggregation once the plan sponsor has more than 50% interest in the plan sponsor. If the Dr. owns less than 50% of the partnership there should be no agregation of the Drs plan with the pship plan because there is no controlled group. However, the CG group rules are complicated. What are the issues being raised by the pship? To be sure your client should retain counsel to review the CG rules.

[2muchstress]

The expense of legal counsel is well worth it, especially if the doctor is to receive $80,000 in retirement for the year.