SEP - SIMPLE re family ownership

[Guest LTurner]

C Corp owned exclusively by mom and dad has SEP plan

S Corp owned exclusively by children has SIMPLE

children are paid salary in C corp, hence all family members are 'filling' up the SEP

all employees are in the S Corp where the SIMPLE exists

There appears to be no common ownership. Yet sole owners of the S Corp have salary from the C Corp

appears one company was carved into two in order to be able to do this. we presume there is a problem here, just cannot decide where....

the family has managed to discriminate in favor of themselves by the structure they created with the two corps

what if any problems exist? :confused:

[Guest Fishchick]

I believe they could still be a controlled group and/or affiliated service group. Family aggregation rules in regard to common ownership issues were not repealed. See IRC Sections 1563 (a) and 318 and 4975(e)(6)