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I have an LLC client that files form 1065. It created a defined benefit plan. It has no employees and only 4 members. The members own 58%, 15%, 15% and 12% respectively of the company. One of the members that owns 15%, opted out for participation in the first year of the defined benefit plan. Instructions to form 1065 state that defined benefit plan contributions are not deducted in the first page of 1065, but on Schedule K-1 Line 13, OTHER deductions, with code R for DB plan. Instructions state that if plan is a defined benefit plan, a partners distributive share of payments to such plan is determined in same manner as his distributive share of partnership taxable income. Therein it appears that the one partner who opted out of participation in DB plan will be allocated 15%( his ownership) in the DB plan contribution although he is not a participant in such plan. Is this the case?



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