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LLC1 (taxed as a partnership) sponsors a cross-tested 401(k) plan. LLC2 (also taxed as a partnership) is a participating employer. The two LLCs are part of a group under common control.

LLC2 has only one employee. He earns compensation from LLC1 and LLC2. The CPA is asking me for the most advantageous was to structure his compensation/contributions in the two LLCs.

He earns more than the 401(a)(17) limit and will get an allocation of $40,000 in 2002.

Any ideas?

michele

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