ILLMAS Posted October 20, 2014 Report Posted October 20, 2014 I need to confirm that the rules of attribution does not apply to this scenario: Dad and Mom own two companies that are considered brother-sister controlled group, they are planning to sell XYZ to son A and B (age 21 or older), and the sons are planning to split the company and create two separate corporations. I looked into the control group/rules of attribution and it seems they are no longer considered a control group and the rule of attribution does not apply because the parent does not own greater than 50% of son's businesses. Any takers? ABC XYZ Mom 50% 50% Dad 50% 50% XYZ becomes LOL DBA Son A 100% Son B 100% Quote
Lee B Posted October 20, 2014 Report Posted October 20, 2014 I haven't had to look at this in a while, but the rules vary some depending on which part of the Tax Code is in play. In other words be careful, because what may be OK in one scenario may not be OK in another scenario. Quote
ILLMAS Posted October 20, 2014 Author Report Posted October 20, 2014 I haven't had to look at this in a while, but the rules vary some depending on which part of the Tax Code is in play. In other words be careful, because what may be OK in one scenario may not be OK in another scenario. Exactly, that is why I am trying to get feedback from others, this one is not a simple yes or no question. Quote
kcjenkins Posted October 21, 2014 Report Posted October 21, 2014 These companies, are they corps? Quote
kcjenkins Posted October 21, 2014 Report Posted October 21, 2014 BTW, for a one place source of all the related links, try http://www.fourmilab.ch/ustax/www/t26-A-1-C-I-C-318.html Quote
ILLMAS Posted October 21, 2014 Author Report Posted October 21, 2014 These companies, are they corps? Hypothetically speaking, yes they are all corps and will be corps once they split them. Quote
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