12AX7 Posted December 20, 2010 Posted December 20, 2010 A 25% owner of a company sells his shares in 2010 and becomes an "independent contractor". He performs his services at the company he sold to the other shareholders. The company performs real estate appraisals. The former owner happily does his job at his same desk and now wants to start an Owner's 401 (k) Plan for 2010. He has no W-2 income for 2010 from the company, just 1099 income. Does this appear to be an Affiliated Service Group for 2010? It seems to be a classic example, unless it can be argued that the real estate appraisal company is not an FSO or he would not be an HCE of the company he sold in 2010 because he had no W-2 income for 2010. I appreciate any thoughts on this matter.
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