Must all self-employment income be combined for SEP?

[jukeboy56]

A taxpayer has established a SEP plan for his Schedule C income (with no other employees) and has a profit from that enterprise. He also has a farming enterprise with a loss for the same year (also no employees).

Am I correct in thinking that he can use the income from Schedule C to calculate his SEP contribution without combining it with the loss from Schedule F ?

[ERISAnut]

I would not agree with that based on the fact that the 415 limit is applied to treat all related employers as a single employer. This is a subject of debate among many practitioners. Some practitioners try to treat the negative income from one company as a zero, and then add it to the income of the other company. I think that is wishful thinking.

[Belgarath]

For anyone who wants to look at it further, Sal Tripodi has a good discussion of the issue (presenting both sides) in the EOB, pages 1.144 and 1.145 of the 2006 edition, if you have access to it.