metsfan026 Posted September 15, 2022 Share Posted September 15, 2022 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? Link to comment Share on other sites More sharing options...
Bill Presson Posted September 15, 2022 Share Posted September 15, 2022 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). Luke Bailey 1 William C. Presson, ERPA, QPA, QKA bill.presson@gmail.com C 205.994.4070 Link to comment Share on other sites More sharing options...
metsfan026 Posted September 15, 2022 Author Share Posted September 15, 2022 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! Bill Presson 1 Link to comment Share on other sites More sharing options...
Bill Presson Posted September 15, 2022 Share Posted September 15, 2022 On the "no participation" make sure they aren't named as officers in the other company and don't have any signature authority. Luke Bailey 1 William C. Presson, ERPA, QPA, QKA bill.presson@gmail.com C 205.994.4070 Link to comment Share on other sites More sharing options...
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