Maximum Deductible Contribution for Partner

[emmetttrudy]

Company is a one member LLC who receives a K-1 each year. It is a Beginning of Year Valuation. For 2011, he deductibl contribution is lmited to 2011 Schedule K-1 less 1/2 SE tax, correct? So let's say the Minimum Required Contribution is calculated at 1/1/2011 to be $100,000. But the 2011 Schedule K-1 ends up being $50,000. The full $100k has to be contributed to meet the minimum funding requirements. What impact does this have on the contribution amount and/or deduction, penalty for nondeductible contributions, etc?

[shERPA]

Company is a one member LLC who receives a K-1 each year. It is a Beginning of Year Valuation. For 2011, he deductibl contribution is lmited to 2011 Schedule K-1 less 1/2 SE tax, correct? So let's say the Minimum Required Contribution is calculated at 1/1/2011 to be $100,000. But the 2011 Schedule K-1 ends up being $50,000. The full $100k has to be contributed to meet the minimum funding requirements. What impact does this have on the contribution amount and/or deduction, penalty for nondeductible contributions, etc?

Something is off. A single member LLC is generally a disregarded entity and reports income on the member's Schedule C. Is this a Form 1065 K-1? Or perhaps and 1120S K-1?

[emmetttrudy]

1065 K-1

[ScottR]

The deduction for 2011 is limited to net k-1 (or Sch C) minus 1/2 SE taxes.

I don't think the tax on nondeductible contributions applies to DB plans any longer, does it?

I imagine any unused deduction could be carried over and claimed in 2012, but i'm not 100% sure. To avoid any problem, have them fund just the deductible portion during 2011, and the remainder in the first 8.5 months of 2012.

... Scott