Client has operated as a sole proprietor and contributes to his SEP based on the net earnings from the business every year. Client and his spouse open a new business in which they materially participate (husband /wife partnership filed 1065). This business will also have employees separate from the husband/wife. In year 1, the new business reports a loss for self-employment purposes. Would the client be able to exclude the net earnings from the partnership and determine his SEP contribution based on his sole proprietor business or would the net earnings from both businesses have to be aggregated for purposes of determining net earnings from SE for contribution purposes? Would this SEP now be subject to controlled group rules as well and potentially make the employees eligible in future years? Thank you.