Controlled Group - Combo plan deduction

[Jakyasar]

Hi

Non PBGC covered combo plans

Sponsored by a corporation with the employees and a sole-prop. Joe owns both entities.

Needs to use 31% rule.

Under the corporation satisfied the 31% rule.

Under the sole-prop only deducting CB for Joe only. No DC deduction.

If you combine them for total deduction, fails 31% rule.

However, ss they are separately deducting the contributions, I think it is ok to test deductions separately.

Am I wrong?

[Jakyasar]

Did some reading and looks like related organizations under 414b, limits of code section 404 would be aggregated on a combined basis. Apparently, if affiliated service group, they need to be treated as unrelated employers. How you allocate (for all adopting the plan) is a different story as still undefined.

Still would love to hear any comments.