pixmax Posted December 14, 2009 Posted December 14, 2009 I have a control group with 7 companies. One company has 3 employees who each own 8% of that company but has no other ownership in the other companies. The other 75% is owned by one of the other companies so it is controlled. Do I count these ee's who own 8% as HCE's and Keys? They own more than 5% of 1 out of 7 companies.
MSN Posted December 14, 2009 Posted December 14, 2009 Yes, they would be HCE & Key. IRC 414(q)(2) references 416(i)(1) which states aggregation does not apply for purposes of determining ownership.
Mike Preston Posted December 14, 2009 Posted December 14, 2009 They are certainly key, but I'm not so sure you have a controlled entity. Who said they were controlled? Is it controlled via the affiliated service group rules? Or am I missing something?
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