Pension Rights Center
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Plan Compliance Analyst (administrator) RPA
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Defined Contribution Plan Administrator Pension Investors Corp of Orlando Inc
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Advanced Plan Designs, LLC
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Definiti
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Quantech Pensions LLC
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Small NY Actuarial TPA Firm
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Howard Simon & Associates
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Manager/Supervisor of Benefits and Payroll Compensation Virginia Farm Bureau
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Southern Pension Services
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Retirement Plan Relationship Manager Prosperity Advisors, LLC
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Southern Pension Services
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Carpenter Morse Group
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Question 131: Corporation A is taxed as a "C" corporation. It's owned 50/50 by husband and wife. Now they want to start Corporation B as a management company, to be taxed as an "S" corporation. Are the two corporations a controlled group if Corporation B is also owned 50/50? What if Corporation B were owned 90/10? |
Answer: For controlled group purposes, there is always attribution between husband and wife unless either (1) they are divorced (final or interlocutory) or separated; or (2) the noninvolvement exception applies. One of the conditions of the noninvolvement exception is that the one spouse doesn't own any of the stock directly, which isn't the case on the facts you cite. In fact, it will be a controlled group, assuming the parties are happily married, unless one spouse owns 100% of one business and the other owns 100% of the other business. (Even then, a controlled group may exist. See Q&A 111 for more details.) |
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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