Money Purchased Pension Plan - Contribution Limits - Sch C/Sch F

[Hoosier]

Client has a Sch C (Dental Practice) and Sch F. Client has a Money Purchased Pension Plan through the American Dental Association Member Retirement. Preliminary Sch C profits are $150k and Sch F losses are $200k. Client submitted preliminary Sch C information to his investment advisor for the Pension Plan and the advisor calculated a contribution amount. Despite my suggestion to do so, client did not submit the Sch F information to the advisor for the calculation. Based on the preliminary Sch C only the calculation from the advisor results in a contribution amount for the client of $19k and a contribution amount of $4k for his two Sch C employees. I plan to report the deductible amount of the $19k on line 28, page 1 of the 1040 (if allowable) and the employee amount on Line 19 of the Sch C. However, my concern is that the client may not be allowed to take any portion of the $19k contribution as an adjustment to income because he had no self-employment income for the year (Sch F loss exceeds Sch C income). My main question is whether or not the client can make a contribution and take an adjustment to income when he has no self-employment income. Looking for any thoughts, advice or suggestions.

[Uncle Sam]

That 2016 contribution of $ 19,000 must be paperworked with the custodian to remove it as a 2016 contribution and apply it to 2017 otherwise he'll be penalized for an excess contribution.

[New York Enrolled Agent]

Client has a Sch C (Dental Practice) and Sch F. Client has a Money Purchased Pension Plan through the American Dental Association Member Retirement. Preliminary Sch C profits are $150k and Sch F losses are $200k. Client submitted preliminary Sch C information to his investment advisor for the Pension Plan and the advisor calculated a contribution amount. Despite my suggestion to do so, client did not submit the Sch F information to the advisor for the calculation. Based on the preliminary Sch C only the calculation from the advisor results in a contribution amount for the client of $19k and a contribution amount of $4k for his two Sch C employees. I plan to report the deductible amount of the $19k on line 28, page 1 of the 1040 (if allowable) and the employee amount on Line 19 of the Sch C. However, my concern is that the client may not be allowed to take any portion of the $19k contribution as an adjustment to income because he had no self-employment income for the year (Sch F loss exceeds Sch C income). My main question is whether or not the client can make a contribution and take an adjustment to income when he has no self-employment income. Looking for any thoughts, advice or suggestions.

See if regulation 1.401-10(b)(2) is of help.

[Kram BergGold]

How I have understood it

I have always believed that a self employed retirement plan was business specific. Therefore, I would say his is allowed to make a MPP contribution.