Funding for a controlled group

[Jakyasar]

Hi

Joe owns 100% of corporation and 100% sole-prop - separate lines of bizs with separate income sources. Corporation has employees and sole-prop does not. Both entities adopted the plan

Joe's 2023 DB contribution is 200k split 50/50 between the 2 entities (his w2 from corporation was 165k and had 500k net c from sole-prop so 50/50 of the 401a17 limit).

Joe asked if he could pay the full 200k from the corporation which was not the original agreement.

Joe also asked if he could transfer 100k from sole-prop to the corporation and have the corporation put in the 200k but still deduct separately from each entity.

Any thoughts/comments?

[Bri]

First thought is, why ask the actuary's office rather than the accountant's? 

[truphao]

1 hour ago, Bri said:

First thought is, why ask the actuary's office rather than the accountant's? 

Because when it gets complicated, it's always the actuary who should know, no matter the subject  .  However, this one clearly falls under the purview of a CPA.

[Jakyasar]

I agree but I am curious if anyone had this issue.

[CuseFan]

My understanding - and I thought this came up not that long ago and I opined similarly - is that you can only do that if the CG files a consolidated return, which is clearly not the case here. So for CG AB, A cannot make contributions and take deduction for B's employees on A's tax return, or vice versa, but either can contribute whatever toward A's and B's employees if AB deducts on a consolidated tax return. 

[Jakyasar]

CuseFan, I agree with you.

They would take separate deductions, just that there was an issue with banking and making the deposit from sole-prop and that is why sole-prop wanted to give the corp the monies and corp making the deposit.

Makes no sense but I am curious if anyone has seen done this way.