Aggregation of Compensation?

[Dougsbpc]

Suppose you have a calendar year 401(k) plan sponsored by a Corporation. Also an LLC adopted the plan as a participating employer.

Ellen, the 100% shareholder of the corporation also has a 45% interest in the LLC. Her compensation was as follows:

1. Corporation W-2 = $100,000

2. LLC K-1 self employment income (adjusted for contribs 1/2 SE tax etc) = -$90,000

Question: Must the $100,000 be aggregated with -$90,000 for contribution allocation purposes? Or does the the corporation fund its contribution based on $100,000 of salary and the LLC fund its contribution based on $0?

Thanks a million.

[QDROphile]

The plan documents should say..

Is this a multiple employer plan or a single employer plan because of an affiliated service group relationship?

[Dougsbpc]

This is a single employer plan and there is an afiliated service group.

The document appears to require the aggregation of compensation from related employers.

The definition of Total Compensation for self-employed participants is earned income net of the adjustments for contributions and 1/2 SE tax.

I am just not sure whether this would include losses. In other words should it be $100,000 combined with $0 = $100,000 or $100,000 -$80,000 = $10,000.