ASG

[Guest Beacon]

The facts are:

An S corp owned by two sole proprietors; the s corp is in the employee benefits business and receives commisions for group medical insurance and life insurance. The S corp has 4 employees, the employees service the business of the s corp as well as process and service business of 2 non owner non employees who pay the s corp a management fee for services which include rent and phones, etc. The s corp also services some business for the 2 sole proprietors that are 50% owners.

The sole proprietors income is schedule c income primarily 75%+ from investment management fees and commisions paid to them by a broker dealer, the other 25% is from insurance commisions.

The plan is to have a SIMPLE IRA for the S corp and seperate Profit Sharing and/ DB plans for the sole proprietors. We are receiving conflicting info as to whether or not this is an ASG.

Thanks for any input

[Ron Snyder]

Read IRC section 414(m). If it is not clear to you, get advise from an employee benefits attorney.

It appears to me that this is an affiliated service group. Each of the owners owns over 10% of the service provider S corporation. Employees of the S corporation would be entitled to benefits that are comparable to the best of the 3 plans.