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solo 401k with Sch C and K-1..?

PostPosted: 16-Jan-2020 9:44am
by rblaria
A client has had a Sch C business for a while. She has a solo 401k plan.

Last year, she became a minority partner of a partnership. This partnership is losing money for now, and she has no capital contributed..But she receives guaranteed payments from the partnership. The partnership has no retirement plan set up.

In calculating MAX 401k contribution figure, can she include the guaranteed payments as her business income?
I don't think she can...but any opinions on this?

Re: solo 401k with Sch C and K-1..?

PostPosted: 16-Jan-2020 11:45am
by tb_in_sf
For retirement plan purposes a partner is considered an employee of the partnership, even though it's "self-employment" income in other contexts. A 401k plan would need to be established by the partnership to receive contributions based on a partner's income.

Re: solo 401k with Sch C and K-1..?

PostPosted: 18-Jan-2020 2:26pm
by rblaria
tb_in_sf wrote:For retirement plan purposes a partner is considered an employee of the partnership, even though it's "self-employment" income in other contexts. A 401k plan would need to be established by the partnership to receive contributions based on a partner's income.


Thank you.