Blue Ridge ESOP Associates
(Charlottesville VA / Telecommute)
Retirement Plan Consultant
Cetera Retirement Plan Specialists
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|Question 207: Is there attribution between brothers and sisters for controlled group purposes? If so, perhaps the situation below is a controlled group.|
Answer: No, there is never attribution between siblings for controlled group purposes. Here is the fact pattern involved:
John and Joanne are brother and sister. Maria, James, and Frank are children of John. All persons named are over 20.
There are two key attribution rules applicable here:
Given that, it is clear that there is no controlled group. Y and Z do not have any overlapping owners. X and Z have overlapping owners, but they hold less than half of X, and so effective control cannot exist. X and Y have overlapping owners, but they own less than 80% of X and so a controlling interest cannot exist. So, the three companies are totally separate for retirement plan purposes.
The controlled group attribution rules are laid out in detail in Chapter 7 of my book, Who's the Employer.
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.