Solo DB plan for non-equity partner with a twist

Lawyer gets 1099-R income of about $1 million from a partnership in which he has no equity and wants to set up a solo DB plan.

A 1099-R is for reporting "Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc."

On what form is the lawyer's income being reported to him?

I assume you meant the Form 1099-Misc as an indpendent contractor.

My opinion (not giving out advice)

• The law firm and title company are a controlled group. The individual sole prop (where the plan is to be sponsored) is not part of that CG.
• However, be very careful of a possible ASG. I would advise the client to get ERISA counsel involved and get an opinion.
  • With respect to the ASG issue, I don't see an ownership relationship between the individual and the law firm or the individual and the title company.  This would eliminate an A-Org and B-Org, but there is always the management type ASG depending on the type of services the individual is providing to the law firm.
  • Also, don't forget the "catch-all" anti-abuse provisions under 414(o). In my experience, I have not seen the IRS try to apply that provision, but that is just my experience.  

One more item I just noticed--non-equity partners do not typically receive a 1099. They get a K-1. Are you sure this guy is not a profits partner? You are calling him a "partner." Get this issue resolved first. Because if he is in fact an profits partner, then all bets are off in what I previously discussed.