Related Group Question

[R. Butler]

I hate related group issues.

Car Dealer Co. & Management Firm, LLC are a controlled group. Car Dealer Co. will acquire 50% ownership in New Car Co. (the other 50% is owned by unrelated parties). I need to analyze issues if Management Firm, LLC performs management service for New Car Co.

These are my thoughts thus far:

1. If Management Firm, LLC principal business is performing management functions for New Car Co. I have an ASG with Management Firm, LLC & New Car Co. I am presuming that for the ASG to exist Management Firm, LLC would probably have to derive at least 50% of its business from services performed for New Car Co.

2. If an ASG exists between Management Firm, LLC & New Car Co. are ASG that doesn't necessarily mean that Car Dealer Co., Management Firm, LLC & New Car Co. are treated as a single employer. What it does mean is that I have overlapping related groups & then there are competing views as to whether or not those overlapping are treated as a single employer.

Am I on target here or way off base?

Thanks in advance for any guidance.