Lucky32 Posted February 7, 2023 Posted February 7, 2023 I've been trying to learn about both topics and now I've run across a situation that incorporates both and would like to get this right. A husband and wife own 100% of company A, which sponsors a profit sharing plan. Their adult daughter and her husband own 100% of company B which has absolutely no transactions or involvement with A. All 4 people are only employed by their own companies. Would the attribution rules cause employees of B to be covered in A's plan in such a situation? Would the answer be different if the daughter and son-in-law owned only a small percentage of B? When a person has any ownership in business that sponsors a plan, it appears to be standard practice when requesting end-of-year info to also ask if their spouse has an ownership interest in any other company in order to determine CG situations (and ASG situations if service organizations are involved). Is there a need to also ask whether the owner's children (as well as the owner's parents) own a part of any company so a similar determination can be made? Thank you in advance for your help.
Bri Posted February 7, 2023 Posted February 7, 2023 The trick is to keep track of which Code section's attribution rules govern which determinations. For CGs it's 1563 and so that's where the "minor child" trip-up has happened so often they finally legislated it out in Secure 2. Lou S., Bill Presson and CuseFan 3
Popular Post Bill Presson Posted February 7, 2023 Popular Post Posted February 7, 2023 If you use this, you'll be good with most situations. There will be some changes in 2024. https://www.lfg.com/wcs-static/pdf/Attribution of Ownership in Retirement Plans - PDF.pdf Lou S., CuseFan, Kac1214 and 2 others 4 1 William C. Presson, ERPA, QPA, QKA bill.presson@gmail.com C 205.994.4070
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