267 attribution

[R. Butler]

Managament Co. provides management services to several restaurants. Trying to determine which companies should be part of a management group.

Management Co. Owned 100% by Person 1

Co. A Owned 85% by Person 1; 15% by Person 2

Co. B Owned 35% by Person 1; 35% by Person 2; 30% by Person 3

Co. C Owned 100% by Person 1's sibling

Co. D Owned 50% by Person 4 and 50% by Person 5

Co. E Owned 25% by Person 1 and 75% by Person 1's sibling (Different sibling from the Co. C owner)

Assume Management Co. derives 20% of its revenue from each co. If that assumption is correct then I think the Management Co., Co. A, Co. C and Co. E would be part of the group. I can include Co. A, Co. C and Co. E because siblings are family under §267.

I do not see that I could include Co. B or Co. D. Person 1 would need 50% onwership to bring Co. B into the group & Co. D's owners are unrelated.

Am I analyzing this correctly?

Thanks in advance for any guidance.

[Guest Sieve]

I think you're correct. But, if you are, then I doubt that you have a managmenet ASG because the Management Co. is not providing management functions "for 1 organziation (or for 1 organization and other organizations related to such 1 organization) . . ." IRC Section 414(m)(5)(A). Raher, it is providing management services to more than 1 organization.