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Question 108: Suppose you have a doctor who owns 100% of a professional corporation and 50% of a partnership. He as an individual provides management and medical services to the partnership. There is no cash flowing between the partnership and the professional corporation. The two entities are totally separate in every way-- clients, employees, business names, etc. I know they are not a traditional affiliated service group, but could they be a management function group under IRC 414(m)(5)? | |
Answer: This question is really a continuation of Q&A 107, and requires somewhat the same response.
These management function group rules are discussed in more detail in Chapter 13 of my book, Who's the Employer?. The related party rules are discussed in Chapter 17. |
Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner or to readers. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of this and similar situations.
The law in this area changes frequently. Answers are believed to be correct as of the posting dates shown. The completeness or accuracy of a particular answer may be affected by changes in the law (statutes, regulations, rulings, court decisions, etc.) that occur after the date on which a particular Q&A is posted.
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