One of our clients is 100% owned by a Non-Profit Trade Association. The association consists of approximately 280 member companies. Would the controlled group rules apply to this type of organization? If so, how would the rules be applied?

I do not believe so. No member or group of 5 members owns more than the percentage for controlled group I am assuming.

I dont know how one could determine ownership under the CG rules by a membership corporation which has no equity ownership, e.g. each member has a voting interest in the association.

I do not think that the members of the association cause any problem but the relationship between the client and the Association should.

Would not a controlled group exist between the Client and the Association itself (which owns 100% of the client)?

You might want to look at GCM 39616 and PLR 8702063.

Kirk,

I am without my reference materials and access to my subscription services for a while, in addition I think that a lot of our readers might not ahve access to these older documents, Is it possible to summarize?