OK for 415?

[austin3515]

Got a partnership (medical practice) where the Docs transfered to a hospital 12/31/09. In 2010 they collected receivables in the old company, but provided only very limited services related to closing down the practice, most of which was being done by third-parties, accountants, etc.

Can we do profit sharing for them? They will have box 14A comp.

[12AX7]

The partners have service and earned income (plan income) for 2010, right? You seem concerned that perhaps one of those elements are missing?

[austin3515]

They scarcely provided any service at all. In fact it's possible that many of the partners did nothing at all, as administrative responsiblities are relegated to only one or two of them.

[PensionPro]

This is the way I see it ...

The fact that they have net earnings from self employment indicates services were performed or at least the accountant believes services were performed. If the services were performed in 2010, it is 415 comp for 2010. Of course you will need to check the plan doc.

If they are receiving payment for services rendered in 2009 (which seems to be the case) I would think you have 415 comp if the payments were received by 03/15/2010. I think there is split opinion on whether it is 415 comp for 2009 or 2010.