Person X owns 100% of Companies A and B; hence both companies are in the same controlled group. Both companies have employees, and both are calendar year companies.
Effective June 1, 1999 (for example), X sells his entire interest of Company B to an unrelated person Y.
When are both companies no longer in the same controlled group?
Can Company A set up a pension plan effective June 1, 1999 (say for a 7 month initial plan year) and ignore employees of Company B?
Or, must Company A wait until January 1, 2000 to set up a pension plan? (In other words, are A and B in the same controlled group for the entire 1999 year?)
Or, must Company A wait until 2001 (or later)because ownership (for determining controlled group status) includes ownership interests in the last 5 years?
Would the answers to the above be any different if the original companies were in the same brother-sister controlled group, and the ownership change resulted in them no longer being in the same brother-sister controlled group?
Never dull!