415 limits

[Belgarath]

I have a question regarding the 415 limits in DB plans - specifically (I think) under 1.415(f)-1.

Lets say I have a business manufacturing widgets - 100% owned by me. I sponsor a DB plan for myself and my three employees. We go merrily along our way, and after 10 years or so, I liquidate or otherwise cease to operate the business, and terminate the plan. I then start a new business, selling portable lie detectors to be used when interviewing politicians.

Do I have to count the benefits earned in my widget plan toward my 415 limits in my lie detector plan? And would it make any difference if the businesses were incorporated v. unincorporated?

Although it seems a little "facts and circumstances" - it seems to me that if there's no continuation of prior plan, no CG/ASG issue, no relationship/continuation of prior business in my new business, that I don't have to count it. However, I'm far from certain that this is correct! Any responses appreciated!

[Mike Preston]

You are on the right path. There is at least one PLR that agrees with you. I agree it is a sort of facts and circumstances analysis, but the PLR was based on the two entities not existing at the same time. The greater the separation the better off one is. Sole props don't provide as much separation as separate corporations.

[Belgarath]

Muchas Gracias!