Participation of Union-Member/Owner

[drakecohen]

Corp. owned 49% by Father and 51% by his Daughter.

Daughter and 3 other unrelated non-union employees participate in a 401(k) plan sponsored by the Corp.

401(k) excludes union members.

Father has modest W-2 ($12,000) from Corp. and is paid a large 1099R ($200,000) from Corp. for Management Services that goes on his Schedule C.

Assuming Father is a union member, can this be considered a Controlled Group or Affiliated Service Group to allow the Father entry into the plan based on his Schedule C income?

[ETA Consulting LLC]

How much of his Compensation is received by working under the union contract? To what extent are his benefits in the plan derived from collective bargaining?

Good Luck!

[david rigby]

I'm often intrigued by discussion about "union members", as if that is the final answer to some question. Not sure how picky the IRS is on this point, but it's good to know the second phrase in IRC 410(b)(3)(A):

"...if there is evidence that retirement benefits were the subject of good faith bargaining between such employee representatives and such employer or employers,..."