Ownership and Ability to Contribute

Hi,

I'd like some advice on the following scenario.

The DR owns 2 companies – one company will have a Simple IRA (he will not contribute to the SIMPLE) and the other company (he is the only employee) will have a SEP and he will participate in the SEP.  He is also 50% owner in a 3^rd company which has a 401k – can he contribute to the 401k as well?  Can he max out on both the SEP and 401k?

Thank you!

A SIMPLE IRA is required to cover all members of a controlled group.

A SEP generally is required to cover all members of a controlled group (there are exceptions) but it definitely has to be tested.

My advice is that this isn't going to work. He's likely going to need a 401(k) for the controlled group.

Is the one that he's 50% ownership of considered part of the controlled group? If not, could he do a 401k for the controlled group then something else for the company that he only owns 50% of?

coleboy, of course a review of the documents and other facts would be necessary to provide actual assistance, but based on what you have briefly stated above and treating it superficially as a hypothetical, it would appear that the company in which the Dr. has only 50% ownership is not a member of the CG. Bill Presson's response only addresses the CG.