Determining 415 comp with earned income and w-2

[401kQ's]

I have a plan where the plan was originally a sole proprietorship who had earned income. Since then, the owner also started a corporation who is an additional adopting employer of the 401(k) PSP. The sole proprietor had loss -35,000 earned income for 2014. He also receives W-2 compensation from the corporation. The plan is a Safe Harbor 3%. For purposes of calculating his compensation for the safe harbor contribution, do you net the loss with his W-2 compensation or can you base his safe harbor contribution solely off the W-2 compensation and consider earned income for the sole proprietorship to be zero?

[mbozek]

He cannot make a contribution as a sole prop if he has net loss from self employment. See IRS Pub 560 P 15 col 1.His corp can make a contribution to the plan as a separate employer for up to 25% of his w-2 income paid in 2014 plus elective contributions. See IRS pub 560 P 15. col 3