Is Contribution ever deductible?

[Dougsbpc]

A 1 participant DB is sponsored by a sole proprietor. We have always suggested he incorporate.

In 2011 he had $0 net profit. He thought 2012 was going to be a good year so he contributed $50,000 mid year without ever consulting us. It turns out he had $0 net profit for 2012 (plenty of revenue but plenty of expenses). With his MAP-21 election his minimum would have been $0.

I don't believe he can remove the contribution based on it being non-deductible. Does anyone agree or disagree?

Thanks.

[Andy the Actuary]

Check out IRS Rev. Proc. 90-49

[ubermax]

diito to Andy's suggestion

[david rigby]

Just in case you have difficulty locating that item, here it is.
(Sorry, i don't have any information about whether any later IRS document modifies this.)

IRS Rev Proc 90-49.pdf

[Andy the Actuary]

David, please accept my nomination of you for election to the BL Moderator's Hall of Fame. You are well worth the money they don't pay you!

[GMK]

I (and hundreds of others) will happily second that nomination.

[david rigby]

I deserve no adoration.

However, perhaps you (and hundreds of others) could send me $1.

[Andy the Actuary]

Here is link where you may locate rev. rules, rev. procs., etc.

http://www.legalbitstream.com/irs_materials.asp?pl=i2