Combined 415 limits for an individual who is a participant (partner) i

[Moe Howard]

A medical doctor practices two separate specialities (general surgery & family practice). He is a 50% partner in a two man member PLLC (which only performs general surgery)... the PLLC has a KEOGH-MPPP. He also practices family medicine as a sole-proprietor ...which has a defined contribution SEP. The partnership & sole-proprietorship are NOT related in any way (regarding services or billing or location etc.). QUESTION: Can he contribute $30,000 to each of the two plans in the same year (a total tax deduction of $60,000) ?? OR must the two entities (partnership & sole-propritorship) be aggregated and deemed a "single employer" ? A tax code or court case would be much appreciated.

[pjkoehler]

Aggregation of the two plans is required only if the PLCC and the Sole Proprietorship are either: (1) under common control, as described in the regulations under Code Section 414©, or (2) form an affiliated service group ("ASO") described in Code Sec. 414(m). While there is insufficient cross-ownership to establish a controlled group of trades or businesses, the doctor is a partner in the PLLC and it sounds like he is "regularly associated" with the PLCC in performing services for the PLCC's patients. This would be a classic A-Org type ASO, i.e. it comes within the definition set forth in Code Sec. 414(m)(2)(A). Under Code Section 414(m)(1), the employees of the two businesses are treated as employed by a single employer for multiple purposes including compliance with Code Sec. 415. One factual issue is whether the doctor either regularly performs services for the PLLC or is regularly associated with it in performing services for the PLLC's patients. Since there are only 2 50% owners of the PLLC, presumably, the doctor is not a mere passive investor, but performs something approximating half the procedures or takes on half the patient load. The Service has not issued final 414(m) regs and it withdrew the proposed ones some time ago, so the guidance that's out there is in the form of Revenue Rulings, Letter Rulings and TAMs. It's probably worth researching the available guidance on the issue of the regularity of the association or performance of services, but in the final analysis, you'll probably determine that taking the position that these two businesses do not form an ASO is extremely aggressive.

[This message has been edited by PJK (edited 05-19-2000).]

[Guest rhp]

I think the proposed regs issued under 414(m) are still outstanding and can be relied on. I would refer you to them for guidance. The management consulting proposed regs were withdrawn. You state that the two practices are separate, that there are no services between them and that they located at two different locations. The Doctor participates in the PLLC plan and has his own Keogh plan? Sounds like they are separate groups.