Controlled Group

[Guest 409 eh?]

Company A owns 50% of each of 3 companies, B, C & D.

The other 50% of B, C, and D are owned in exactly the same percentages by 4 other entirely unrelated companies that are each diversified (they have no large individual owners).

B, C and D thus have the same exact ownership structure; however, are they a controlled group?

I can't see a parent/sub because there's no 80% control. Although it seems illogical, I can't get to a brother/sister either because even if I look through the corporations owning B, C & D, there are no common owners with A and no single owners large enough to get me to the appropriate 80/50 threshold.

Am I missing something? Any input greatly appreciated!

[PensionPro]

Common owners must be individuals, estates, or trusts per IRC §1563(a)(2).

[Guest 409 eh?]

Yes, thanks I'm aware of that rule. I also understood though that there is attribution from corporations and partnerships so that if the individuals just set up 1 person corporation and it owns the stock, you can still treat it as owned by the individual (to the extent of their ownership interest) for the brother/sister controlled group rules.

That being said, where we have diversified corporations, "looking through" the corporations won't do us any good because all the owners are owned by multiple other people and in no giant percentages. Does that mean we have no controlled group? Thanks everyone.

[Lou S.]

Company A owns 50% of each of 3 companies, B, C & D.

The other 50% of B, C, and D are owned in exactly the same percentages by 4 other entirely unrelated companies that are each diversified (they have no large individual owners).

B, C and D thus have the same exact ownership structure; however, are they a controlled group?

I can't see a parent/sub because there's no 80% control. Although it seems illogical, I can't get to a brother/sister either because even if I look through the corporations owning B, C & D, there are no common owners with A and no single owners large enough to get me to the appropriate 80/50 threshold.

Am I missing something? Any input greatly appreciated!

If you have 5 or fewer (though I think that is what you meant by "no single owners") who get you to the 80/50 you may have one or more controlled groups between B, C, & D but I don't think you are missing anything here and it does not appear to be a controlled group from what you are describing.