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Controlled Group - Husband & Wife


metsfan026

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I just wanted to double-check if this would be considered a controlled group or not:

Company A - Husband owns 100%
Company B - Wife owns 100%

The two business, while in the same industry, are completely unrelated and the spouses do not work or do business with each other.

So would this be a controlled group through attribution or are they excluded?

 

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1. Do they have a minor child?

2. Is it a community property state?

3. The spousal attribution exception from the IRS: EXCEPTION: No attribution between spouses if there is no: • direct ownership, • participation in company, and • no more than 50% of business gross income is passive investments. See 1.414(c)-4(b)(5)(ii).

William C. Presson, ERPA, QPA, QKA
bill.presson@gmail.com
C 205.994.4070

 

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1 hour ago, Bill Presson said:

1. Do they have a minor child?

2. Is it a community property state?

3. The spousal attribution exception from the IRS: EXCEPTION: No attribution between spouses if there is no: • direct ownership, • participation in company, and • no more than 50% of business gross income is passive investments. See 1.414(c)-4(b)(5)(ii).

1) No

2) No (they are in NY)

So there's no attribution, which is what I thought.  Thanks!

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