Multiple K-1s and negative net comp

[doombuggy]

I have a client that has 5 owners. They each have multiple K-1s.

Owner #1 has 1 positive line 14, 1 negative line 14 and a W-2.

Owner #2, #3 & #4 has 2 positive line 14 and 1 negative line 14.

Owner #5 has a negative K-1, plus a W-2 and 1099.

Owners #1 and 5 are less than 5% owners.

They all made salary deferrals.

Owners 2, 3 & 4 have negative net comp.

The negative K-1s have a positive number on line 4 guaranteed payments, but a negative number on line 1 ordinary business income (loss).

so my question is what do I report as compensation? This plan has SHM. I assume that they can defer on the "positive" or guaranteed payments off those K-1s?

[Flyboyjohn]

Unfortuantely not, having positive guaranteed payments but a larger amount of ordinary loss (resulting in a negative line 14) means no earned income and therefore nothing to defer against.

[doombuggy]

What about the K-1s that have a positive number on line 4 and 14?

[Kevin C]

Are all of those K-1s from trades or businesses that adopted the plan? See 1.401-10(b)(2).

[doombuggy]

I just got off the phone with the client as we are trying to sort out the "group" (its medical).

I want to say that of the 3 K-1s, only 1 of them would be mentioned in the plan doc done in 2009. I am going to guess that the 1 group was created later and then in late 2013, the 3rd group was created, hence the 3 K-1s. the group that was "interim" is the one with the negative.

All the clinics in the group are under LLC "A."

LLC "B" - what I believe to be the group created after the doc was drafted - has no employees but is owned by the 3 owner of LLC "A" plus 2 others (who are less than 5% owners)

LLC "C" is the new entity that is owned by LLC "B" plus 2 others - 1 of which is an individual who is a less than 5% owner, the other is an LLC.

Can I make it any more complicated?

[Flyboyjohn]

Seems to me that if the plan has only been adopted by 1 of the 3 entities then only the K-1 and earned income from that one entity can be considered (unless they're on a standardized prototype which automatically sucks in other members of the controlled group)