BG5150 Posted February 12, 2021 Posted February 12, 2021 Woman owns half of an S-Corp with husband. Each takes $40,000 W2 income, defers $15,000. Also owns partnership w/ husband (50-50). Both have losses of ($150,000). Each. Because there is a controlled group, can they make the 401(k) deferral b/c it came from W2 wages? Or are they out of luck, because the combined income is negative? QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
BG5150 Posted February 12, 2021 Author Posted February 12, 2021 Not sure what you mean there? Am I not allowed to use negative numbers in my question? QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
BG5150 Posted February 12, 2021 Author Posted February 12, 2021 Or no deferral b/c of the negative numbers? QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
John Feldt ERPA CPC QPA Posted February 15, 2021 Posted February 15, 2021 For plan purposes, the partnership income is considered as zero. You do not net the compensation from one entity with a self-employment loss at another entity. Bill Presson 1
BG5150 Posted February 15, 2021 Author Posted February 15, 2021 So, if I have: Company A: 30,000 W2 Comp Company B: (10,000) loss Company C : $50,000 net self-employment I use 80,000 as comp. QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
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