Controlled Group

[Fisher]

Parent A owns 100% of Company X. A also owns 52% of Company Y with 4 adult children also owning 32%(8% each). The other 16% ownership is unrelated. I would just like confirmation that this would represent a controlled group since A owns MORE than 50%, thus requiring the adult childrens shares to be considered for a total of 84%. On the other hand, if A only owned an even 50%, and each adult child had 8.50% each totalling 34%, there would not be a controlled group situation between Company X & Y.

[Belgarath]

I agree - in general terms. You can still get burned - the ownership is either more than 50% of the value, or more than 50% of the voting power. So the adult children could own non-voting stock, for example, and therefore bring it back into controlled group status even though it might not appear to be so on the surface. Ditto with attribution from options, etc.. great stuff! Which is why we always refer them to their attorney to make the determination!