415 Limit when an owner is in more than one plan

[emmetttrudy]

Owner A owns 100% of Company A

Owner A owns 50% of Company B

There is no other mutual ownership (or even employees). Both plans allow for profit sharing contributions.

I know the employee (over age 50) can only max out his deferrals at $24,000 taking into account employee contributions to both plans. But what about employer contributions?

If he contributes $24,000 employee deferrals to Company B and they give him a $35,000 profit sharing contribution to get him to the $59,000 limit, can Company A also allocate him a $53,000 profit sharing contribution?

Assume no controlled group or affiliated service group. Is that what makes them considered "related"?

[Lou S.]

 

Quote

 

§415 (h) 50 percent control

For purposes of applying subsections (b) and (c) of section 414 to this section, the phrase “more than 50 percent” shall be substituted for the phrase “at least 80 percent” each place it appears in section 1563(a)(1).

 

If he is exactly 50% or less you are OK. If he is more than 50%, then one limit.

[emmetttrudy]

thank you