Control Group question

[cpc0506]

Holding company owns 100% of Employer A (our client).

We find out that Holding Company also owns 60% of an International Company (I will call them Employer I) and 40% of another US Company - Employer B. No issues so far. Do you agree?

We now find out that Employer I owns the other 60% of Employer B. I think I now have a control group with another US Company - Employer B. Do you agree?

[Lou S.]

Do I follow this correctly?

HC 100% -> A

HC 60% - > I

HC 40% -> B

I 60% -> B

Wouldn't that translate to HC pass through ownership from I being 60% of 60% = 36%

So HC 40% (Direct) + 36% (Indirect) = 76% -> B < 80%, thus no CG?

Or am I off base on my analysis?

[RatherBeGolfing]

I agree with Lou.

HC is attributed 60% of company I's 60% which is 36%. Add that to the 40% direct ownership, we still don't have enough to meet the 80% threshold.

[QDROphile]

Except for the 50 percent threshold under section 415, which probably will not affect anyone.