Brother Sister Company and Family Attribution Rules

For 401(a) testing purposes would Company A which is owned 50/50 by husband and wife, and Company B owned 50/50 by their children be considered a brother sister company part of a controlled group? It's clear that if these individuals were unrelated the answer would be no because 5 or fewer individuals do not have more than 50% common ownership. So for example the children have 0% ownership in Company A and the parents have 0% ownership in Company B. However the Section 318 family attribution rules state that husband and wife are deemed to own each others shares and parent and adult children similarly are deemed to own each others shares. Further Reg Section 1.414(c)-2(c)(2) states that if an individual is in effective control of a company, (greater than 50%) then he or she is deemed to own their parents or children's interest in that company. However, I interpret Section 318 and the 414 regs to only apply to family attribution within a single company, not among 2 companies. So even though the husband and wife are deemed to each have 100% effective control of Company A, this shouldn't mean that the parents are deemed to effectively own their children's 50/50 ownership interest in Company B and vice versa? If this were correct then Company A and B would be deemed to be a brother sister controlled group of companies which I don't agree with especially since each owner does not have a greater than 50% interest.. Any thoughts or experience with this issue?

318 doesn't apply to controlled group attribution. That's 1563.

This is very helpful: LFG controlled group link

Thank-you Bill. I agree that the 1563 family attribution rules apply to brother sister companies. So in my set of facts, the concern is that since each parent has effective 100% ownership control of Company A, then are the parents deemed to own their children's 100% ownership in Company B which would then make the 2 companies part of a controlled group. The example in the article you attached seems to suggest this. 

Yes parents own each others stock by spousal attribution and own the childrens stock as well so this would be brother sister group....