Single 401(k) multiple entities
Client and his wife have a C corporation that has employees that milk cows. The client and his spouse also have Schedule F & Schedule C income with no employees. This client is interested in establishing a single k to shelter some of the Schedule F income. Can they establish a single k or would they also have to establish a 401(k) for their C corporation since they are the sole owners of both entities?
Permalink Submitted by Alan Spross on Sat, 2012-07-28 03:05
I believe that Sec 414(b) and (c) addressing controlled groups will require that all entities are part of a controlled group and therefore all employees must be covered.
Permalink Submitted by Denise Appleby on Sun, 2012-07-29 00:53
[quote=”[email protected]“]Client and his wife have a C corporation that has employees that milk cows. The client and his spouse also have Schedule F & Schedule C income with no employees. This client is interested in establishing a single k to shelter some of the Schedule F income. Can they establish a single k or would they also have to establish a 401(k) for their C corporation since they are the sole owners of both entities?[/quote]
Alan is right.
Since they own 100% of all businesses, they are all treated as one for Employer Sponsored Retirement Plan purposes.
They are not eligible for a SBO-K