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I think you have to dig deeper into the 414 code.
One of my clients with multiple retail locations, had legal council and accounting look at the code.
There is a portion of the code that address if you only own 10% of the second company but make day to day decisions, that qualifies for 414.
I don't where the 80% ownership is coming from. His team came up with 40% in the 2nd company.
This group has since sold off partnership stores so that they do not have to insures those employees at those locations.
A broker should not be advising on this issue. I reference the code and then let the groups legal team go from there.
The bottom line is IRS code 414 can be viewed in different ways. So let legal council be liable.
One of my clients with multiple retail locations, had legal council and accounting look at the code.
There is a portion of the code that address if you only own 10% of the second company but make day to day decisions, that qualifies for 414.
I don't where the 80% ownership is coming from. His team came up with 40% in the 2nd company.
This group has since sold off partnership stores so that they do not have to insures those employees at those locations.
A broker should not be advising on this issue. I reference the code and then let the groups legal team go from there.
The bottom line is IRS code 414 can be viewed in different ways. So let legal council be liable.
