Add Partner to Solo 401k

toddthebod wrote: ↑Thu Sep 12, 2024 11:25 am

MP123 wrote: ↑Thu Sep 12, 2024 10:42 am
If I perceive the details right here appropriately every partner operates their very own Sch C enterprise, they do not share the enterprise as with a QJV (as a result of that is an LLC in a non-community property state). There are 1099 funds from one enterprise to the opposite, however there is no such thing as a worker relationship, and every partner’s self-employment earnings are restricted to these generated from their very own enterprise.

In that case every partner would sponsor their very own 401k, and every plan would have it is personal 5500 submitting requirement.

If the partner was a W2 worker of the LLC reasonably than a 1099 then they could be included within the LLC’s plan.

I believe I disagree. I consider these two companies are an affiliated service group. There may be nonetheless spousal attribution of possession (simply not by way of youngsters or group property), and the partner’s enterprise presumably commonly performs companies for the primary enterprise.

If these are affiliated corporations, then all which may be wanted is for the plan must be restated to incorporate the opposite enterprise as an affiliated employer? At Constancy it is as simple as including one line (the affiliated employer’s identify) to the beforehand filed adoption settlement.

However how would revenue sharing contributions work? I’ve at all times assumed that revenue sharing contributions needed to be the identical proportion for all contributors. On this case, would they mixture web earnings from the 2 companies to give you the contribution quantity?

However, see web page 7-13 of this doc: https://www.irs.gov/pub/irs-tege/epchd704.pdf It implies that spouses that do not take part within the different’s enterprise wouldn’t have attribution? Excerpt:

Ada and Barton are married. Barton is a physician proudly owning 100% of his medical apply. Ada can also be a physician and owns 50% of a separate medical apply (the opposite 50% is owned by an unrelated physician).

Barton isn’t an worker or proprietor of a direct curiosity in Ada’s apply and fewer than 50% of the gross revenue in Ada’s apply is from passive investments.

Barton, nevertheless, is in control of important administration actions for his spouse’s apply.

Ada doesn’t straight personal an curiosity or take part in Barton’s apply and fewer than 50% of the gross revenue from Barton’s apply is from passive investments.

− Barton is attributed the 50% curiosity that Ada owns in her apply (resulting from his participation in Ada’s apply).
− Ada isn’t attributed any possession curiosity in Barton’s apply.

I do not know if it adjustments the state of affairs that within the OP’s case one partner is performing compensated non-employee companies for one more. [Edit to add: this is what SuzBanyan has also touched on…what is the nature of the services relative to the other business?]