not finding it in black & white: S-Corp K-1 isn't comp

[AlbanyConsultant]

Can anyone provide a link to something that makes it clear that the K-1 an S-Corp owner gets isn't considered compensation? Just not having any luck putting my finger (or mouse) on it. Thanks!

[shERPA]

Durando and Durando v U.S.

https://law.resource.org/pub/us/case/reporter/F3/070/70.F3d.548.94-15716.html

[ETA Consulting LLC]

You'll find it through deductive reasoning as opposed to a statement "K-1 is not Compensation". We know it is not W-2. We also know that it's not withholding wages or 415 safe harbor. So, under what definition of Includable Compensation written in the terms of the plan would it fall under?

Hope this helps.

Good Luck!

[PensionPro]

I’m a shareholder and an employee of an S corporation. Can I contribute to the company’s 401(k) plan or establish a self-employed retirement plan based on my S corporation distributions?

No. Contributions to a retirement plan can only be made from compensation, which, in the case of a self-employed individual, is earned income. Distributions you receive as a shareholder of an S corporation do not constitute earned income for retirement plan purposes (see IRC sections 401(c )(1) and 1402(a)(2)).

http://www.irs.gov/Retirement-Plans/Retirement-Plan-FAQs-Regarding-Contributions---S-Corporation

[AlbanyConsultant]

I've never counted it, but this year I've got an accountant who says that it's "all the same", and I was looking for something clear to point to that explained it isn't.

Thanks, PensionPro!

[ETA Consulting LLC]

an accountant who says that it's "all the same"

I've gotten some of my best VCP work from clients working with these accountants

[Calavera]

Just wanted to clarify that for S-corp the contribution is calculated based on W2 income but is made from the income of the corporation that includes K-1 portion.