How do you calculate Compensaiton for the Doctors in the following scenario?

[stephen]

Three doctors were each Sole Proprietors until 06/01/03, at that time they formed a partnership. (Without consulting with us in advance...)

All of the doctors had calendar year safe harbor 401(k)s. One of the plans was amended to the new plan name on behalf of the partnership. The other two doctors adopted this amended plan.

None of the plan provisions were changed.

Should I combine each doctor's Schedule C (1/1/03 through 5/31/03) and K1 income as calculated (6/1/03 - 12/31/03) and limit each of them to the $200,000 compensation limit?

[alanm]

Yes, and I say this thinking the Docs occupied the same office as sole proprietors, then changed structure to a partnership. Just changing structure is not going to change the necessity of aggregating for the 200k cap in compensation. The situation would be synomous with a merger of companies because they probably contributed their office funrniture and other assets to the partnership as part of their capital account. But this is just a scenario, I don't have the facts.