A Solo K in a loss year….
I have a client who sold his business in 2023. Will have W2 income from consulting for the buyer but his LLC shows no income–shows a $60k loss for 2023. Obviously in a loss year he can not do a employee or employer contribution. But, could he W2 himself enough from the business and pay FICA which would be earned income to put away his $30k to the Solo K as an employee contribution and expand his loss on the LLC?
Permalink Submitted by Alan - IRA critic on Tue, 2023-11-21 15:55
He should check with a tax professional. Election for the LLC to be treated as an S Corp. to generate a W-2 cannot generally be made effective more than 75 days prior to the filing with the IRS.