controlled group

[52626]

Company A is owned by

Joe 59.23%

Other Owners 40.77%

Company B is owned by

Company A 46.5%

Joe 31.34%

Other Owners 22.16%

The other owners all own 5 - 10% and are not related to Joe nor are they participants in the plan.

Are they controlled or just multiple employers under one document.

I know they do not fall under the parent subsidiary rule, since the "parent" company does not own 80% of company B. Not sure when testing for brother sister how you handle Company A's ownership in company B.

thanks

Long Monday.... and controlled groups get very confusing late in the day

[Lou S.]

I could be wrong on this but I thought the owners of A got a proportional share of the ownership.

If I'm correct on that then Joe's effective ownership of B would be 31.46 + (46.5 * 59.23%) = 54.23% so you satisfy the 50% identical ownership test.

If 5 or fewer also have 80% control then you would be a CG.

[Tom Poje]

see page 15 of the pdf file for

organizational attribution rules

e.g. for B, Joe owns 31.34% plus 'attributed' ownership

irs controlled group notes.pdf

[austin3515]

You did not provide enough information. We need to know at the individual level what the "other owners" own of each entity. It would not take much for a CG considering Joe's substantial ownership in both.

And then of course beware of the Affiliated Service Group rules.