Sole Proprietor with Multiple Schedule Cs & Uni-K

[Guest jc1457]

Hi,

I think I know how I should handle this, but wanted to run it by someone else.

I have a client with a Uni-K. He has 2 separate Schedule Cs, no employees for either. Controlled group will apply. One Schedule C has income, the other has a loss. The Uni-K is set up under the Schedule C with income.

My client would like to max out on his Uni-K. Would I calculate the Uni-K deferral and employer contribution on each Schedule C separately (having zero for the C with a loss)? Or would I combine gross earnings from both Schedule Cs and then calculate the maximum contribution?

I believe we have to combine all net earnings (and losses) from both Schedule Cs and then calculate the maximum deferral and match for his Uni-K - but want to confirm that this is correct. I have checked the regs and I have not been able to find specific instructions when multiple Schedule Cs are involved.

Thanks for your help.

Linda

[ETA Consulting LLC]

I would begin with the definition of 415 Compensation for Self Employed individuals. I do not think there is a distinction of which operation the self-employed individual's cash flow comes from. We know that if his 415 Compensation is zero, then his 415 limit will be zero. That's just how I would approach it.

With that said, I would combine the loss with the gain.

Good Luck!