Predecessor Employer

Former partner (or employee for that matter) in a firm now is an independent consultant for the same organization and receives a 1099.  He wants to start a DB plan and deduct away his 1099 income.  Can he consider the prior firm a predecessor employer and use that compensation in his 3-year average?  In describing imputed comp, 414(s) says "prior employer comp for an employer...maintaining the plan"  So this is obviously a reg that is addressing a more traditional migration of employment from one company to another.  I think my client needs to start fresh like a new sole prop but I'm hanging this out there for any creative ideas.

I agree with you that his prior firm comp cannot count in establishing a 3-year average for 415 and that you look only at his "new" SE income.

I am not so sure.  I think if he owned 50% of the prior entity, you can count the compensation.    

Someone will chime in with a confirmation of the percentage, but I believe it is 50%.