Compensation for Owner of PC

We handle 2 plans for a dentist who is a PC; sold the assets of the practice, employees received W-2 for period 1/1 to 2/28 2024.

I am suggesting $0 profit sharing, he knows he has to do a 3% safe harbor on the employees' W-2 1/1-2/28/2024

Question is, what comp do we use to calculate the cash balance plan  (assuming the liabilities are greater the the assets)?

Obviously, if assets greater, no contribution.

I don't see how plan(s) can pass 401(a)(4) or 401(a)(26), possobly w/o a contribution.

The owner will continue the plan as a PC, but I believe his payout will be 1099 which will be funneled to PC and become PC income for plan purpose.

Did the CB terminate or did it last all twelve months? 

Sounds like employer (PC) and both plans are continuing, so 1/1-12/31/2024 PY on both, but all employee other than the owner terminated 2/28, correct? If so, read on, but if not then you have bigger problems.

If employees did not work 500 hours through 2/28 and do not benefit because of that then I think you exclude them from 401(a)(26) count in CB. However, you still have 2024 annual (combined I presume) coverage and nondiscrimination testing, and since everyone benefits by virtue of 3% SH then you have a gateway requirement.

Employee compensation for such would be W2 from the PC, for the owner it would be the applicable metric for the year - either W2 or net earned income from self-employment. For the cash balance, compensation is used to calculate liabilities (pay credits) not the actual contributions. Required funding is a function of both assets and liabilities. 

Both plans still open, client has not made the 2024 contribution; and I am questioning which comp to use.

This is NOT a short plan year.

Both plans will remain in existence as 1 participant plans.

Docs speak of a short plan year and pro-ration, which does not apply; the 1,000 accrual and contribution specification on the CB would create a 401(a)(4) problem.

In answer to CuseFan, your assumption is correctS - Sounds like employer (PC) and both plans are continuing, so 1/1-12/31/2024 PY on both, but all employee other than the owner terminated 2/28, correct?

Applicable metric?   I assume you mean 2/12 of his W-2.

SO, from what you are saying, either make a PS contriubtion (of which he gets $1 per formula, which is new comp.

Correct?

I think he just meant whatever way his pay is reported, W2 versus Sch. C.  But you don't take 2/12 of it just because everyone else stopped working then.