Self-employed net loss

[R. Butler]

LLC taxed as a sole proprieterdhip showed a net loss for 2012. The owner made 401(k) contributions & receieved a match during the year which need to come out of the plan. Is this treated as an ineligible contribution and forfeited or distributed back to the participant as an excess annual addition or excess deferral?

Thanks in advance for any guidance.

[Lou S.]

I think you have a 415 refund that is now eligible for correction under the most recent EPCRS procedure.

[BG5150]

You got it, Lou.

[Guest jmherisa]

The 401k deferral & gains could be refunded as an excess annual addition (415 limit correction). The match will most likely need to be forfeited, not distributed. Perhaps your plan document language will provide further clarification.

[R. Butler]

If the sole propreiter did not take the deduction for the contribuiton on the tax return would it be permissable to just forfeit the contributions adjusted earnings?