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Question 126: Drs. A, B and C each own one-third of a medical practice corporation. Dr. A also provides medical services to a hospital that is unrelated to any of the doctors or the medical practice corporation. Dr. A claims the income he receives from the hospital as earned income of a sole proprietorship. Can Dr. A establish a qualified retirement plan under his sole proprietorship without covering the employees of the medical practice corporation? If he can, are there any limitations to what he can contribute to his sole-proprietorship plan if he also particpates in the medical practice corporation's plan? |
Answer: Can the doctor establish a separate plan? Of course he can. The question is whether it will satisfy the Code's testing requirements. |
Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner or to readers. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of this and similar situations.
The law in this area changes frequently. Answers are believed to be correct as of the posting dates shown. The completeness or accuracy of a particular answer may be affected by changes in the law (statutes, regulations, rulings, court decisions, etc.) that occur after the date on which a particular Q&A is posted.
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