Single Member LLC deferred (ROTH) and had a net loss on both Schedule C's

We got a new client this year.   The owner gave us his information and he took huge losses (due to COVID) on his Schedule C.   He did have a net profit on his rental income on Schedule E.  If I am thinking clearly though - passive Schedule E rental cannot be counted for compensation for a retirement plan?  Is there any loophole?  He deferred every week and maxed himself out for 2020.  Any guidance is appreciated.

Sounds like a 415 excess correctable under EPCRS. He has $0 415 compensation his 415 limit is $0. Check your document for waht happens when you have a 415 excess, you probably refund the deferrals with earnings.