Control Group - maybe

[jkdoll2]

Husband and Wife married in October (2nd marriage for both) the minor kids are from wife's first marriage that they claim as dependants on their taxes. Kids are not adopted my husband.

Husband is a doctor and the medical practice (and all property contained in that) were stipulated as separate property before the marriage. His (husbands) medical group and the his C-corp are in no way associated with his wife's business and are not community property and were completely segregated as such in pre-nuptials before they were married.

Husband has a DB plan and 401k plan already in place with 2 other doctors. He owns 1/3 of the holding company where the DB plan is at. He owns 100% of his C-Corp where his income is passed through the holding company. So his income in his C-Corp is used for the calculation of the DB plan and 401k plan that is housed in the holding company, where he owns 1/3 of.

The wife wants to open her own DB and 401k plan. Does it look like the husband needs to be part of that plan? Since the minor children are not his and his business is totally separate from hers (there is nothing in common with her business) it is hard for me to determine. The husbands income is already being used in a DB plan.

Do I need to test his portion of the DB plan with hers? Would you consider them a control group?

Thanks

[ETA Consulting LLC]

I agree that the minor child issue doesn't exist as the husband did not 'legally adopt' the children. However, Section 1563 of the Code outlines other factors that should be considered for "spousal attribution". For instance, how much of his income is being taken as passive income?

What I would do is print out Section 1653 of the Code and go down line by line and fill in the blanks. This, if nothing else, will give you an idea of all the missing facts that would be necessary to make the determination.

Good Luck!

[jkdoll2]

I agree that the minor child issue doesn't exist as the husband did not 'legally adopt' the children. However, Section 1563 of the Code outlines other factors that should be considered for "spousal attribution". For instance, how much of his income is being taken as passive income?

What I would do is print out Section 1653 of the Code and go down line by line and fill in the blanks. This, if nothing else, will give you an idea of all the missing facts that would be necessary to make the determination.

Good Luck!

Where can I locate the code to look at?

Thanks

[david rigby]

IRC 1563

http://www.law.cornell.edu/uscode/text/26/1563