Compensation for former partner who is now a sole proprietor

[jkharvey]

An individual was a partner in a partnership that maintained a 401k plan. The individual leaves the partnership in 2004 and establishes his own Sole Prop. The Sole Prop adopts its own 401k plan. Can I count as compensation for the Sole Prop plan purposes the Schedule C and the partnership income allocated to this individual?

[Guest sb actuary]

Seems to me that you have two separate employers. The partnership and the sole proprietorship are different employers. I don't see how you can count compensation paid by the partnership as compensation under the sole proprietorship plan.