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Showing results for tags 'sale of business'.
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Hello, I just came across a situation I'm struggling to navigate, would really appreciate input from more experienced folks in the forum. Scenario below: 1. Married clients own two companies in a controlled group, business "A" with W-2 employees and business "B" with only spousal employees (real estate holding company with s-corp election). Neither company offered a retirement plan. 2. Business A has been sold effective 9/1/24. If Business B were to create a solo 401k plan with a 10/1 adoption date, would controlled group rules still apply for the remainder of 2024 tax year? Thanks in advance to anybody who's willing to help me think through this puzzle! -
I have a client that has 5 entities, all owned 100% by Person 1. A-E. The 401k plan is set up under company A. Companies B-E are adopting employers. Companies A-D are being sold on August 1. They will be 100% owned by an unrelated company from Person 1. Person 1 will still own 100% of company E and the sole purpose of Company E will be to perform management functions for companies A-D. Since there is no common ownership as of August 1 between companies A-D and company E, is E still part of the controlled group? Can employees of company E still participate in the plan either for the remainder of the year, until August of next year or must their participation end on August 1?
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I have a client that recently sold their business (ABC) to a private equity firm (XYZ). Before the sale the two owners Tom & John owned 50% each. As of 10/31/19, they sold the business to the private equity firm, and the private equity firm took over as plan sponsor. How are the following affected: 1. Are the employees deemed to be terminated as of 10/31 from ABC and hired by XYZ on 11/1? Does this create an opportunity for employees to take distributions that are not 59.5? 2. For 2019 is testing based on the whole year or should it be split between 1/1-10/31 and 11/1-12/31? 3.Is anything else affected by the change? 4.Am I am overthinking this, and is it a situation where for plan purposes, it is as if nothing happend?
