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I have a potential Client that has a possible controlled group issue. Facts: 2 business with the ownership as follows Co. A Co. B Husband 55% 55% Wife 35% 0% Unrelated Partner 10% 45% Are Co. A & Co. B part of a controlled group given the wife owns 0% of Co. B? It seems like the same 5 or fewer do not own 80% since the wife owns 0% of Co. B but I didn't know if the husband and wife are considered to be a single entitiy. Thanks

Here’s an interesting compensation question: Partnership 1 is owned by Company A, Partnership 2 and Person C. Partnership 2 is 100% owned by Person C. Partnership 2 received a K-1 from Partnership 1 Person C receives a K-1 from Partnership 1 Person C receives a K-1 from Partnership 2 Retirement plan is sponsored by Partnership 1 Partnership 2 is not a sponsor of the retirement plan (neither is Company A). The CPA believes that “pension law” dictates that the K-1 pass-through income from Partnership 2 onto IRS form 1040 Schedule E for Person C should be included for Plan Compensation purposes. My gut feeling is that Person C nor Partnership 2 are adopting employers to the plan and only the K-1 from Partnership 1 is Plan Compensation and only their K-1 from Partnership 1 is eligible Plan Compensation subject to the an EIC. If Partnership 2 adopted the plan too, that seems to resolve this question going forward except Person C’s ownership in Partnership 1 would only total 34%. Should the K-1 self employment income from Partnership 2 be included in the eligible plan compensation? Thanks