Affiliated Service Group-testing date

[Guest dlm]

Two doctors form a subdivision of another medical group. The two doctors have some ownership in the other medical group. The groups refer clients to one another.

On 6/30, the subdivision split entirely from the bigger medical group. So as of 7/1 do we have an affiliated service group?

For controlled groups, section 1563(b) says that if your not a controlled group for more than 1/2 of the year, then your not a controlled group for that taxable year.

Does the same apple to ASG's and FSO'S?

Can we set up a plan for the once subdivision and retroactively make it effective to 1/1/99 and avoid any ASG issues?

thanks in advance for any info!