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Question 38: A corporation is 100% owned by X. A new corporation is created with X as 65% shareholder and Y as 35% shareholder. (1) Does this constitute a brother-sister controlled group? (2) If not, shouldn't we treat it as a controlled group, just to be safe? (3) If it were a controlled group, would it qualify for the transition rule of IRC 410(b)(6)(C)? |
Answer: The answer to the first question is probably no, but I need to make some assumptions. The answer to the second question is NO. The answer to the third question is of course it would. |
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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