Net Sch C = $0

[David]

Section 404(a)(8) seems to say that a self-employed person can't make a deductible contribution to his/her qualified DB plan for a given year if their net Sch C is $0. Am I missing something? Is there a way around this?

[rcline46]

You are correct. Need to look at loss carry forward or backward for sole prop - need a CPA for that one. Or could cause a 'cost basis' in the plan! This is even trickier bacause contrib is deductible, just the sole prop cannot take the deduction.

[Kristina]

Would the employee portion of the contribution be deductible even though it would generate a larger loss? And is this even a possibility for DB plans.