Controlled Group

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
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Joined: Sat Sep 30, 2017 6:46 pm

Controlled Group

Post by Blue_Ocea35 » Tue Sep 10, 2019 9:04 pm

Hi, wonder if anyone can shed some light if my situation falls under a controlled group. So I own an insurance agency under an LLC, taxed as a S corp. 100% ownership. I have employees under the llc. I started part time as a real estate agent with a brokerage and thinking of getting a solo 401k for the real estate practice. I am not sure if I fall under the controlled group as technically as a real estate agent, you are a 1099 so I am self employed with 100% ownership. But since I am not yet a broker, I also technically work for the brokerage too.

I also read up on affiliated services. Insurance and real estate will at times go hand in hand. I may help a client buy a new home and insure it at the same time. So that adds another wrench. It is a small part of course as the vast majority of the LLC's insurance clients aren't buying a home through me .

Spirit Rider
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Joined: Fri Mar 02, 2007 2:39 pm

Re: Controlled Group

Post by Spirit Rider » Tue Sep 10, 2019 10:42 pm

You are most definitely part of a controlled group.

The fact you have self-employed income eligible to adopt one-participant 401k, means that you are a business employer. Two employers owned 100% by the same individual are always part of a controlled group.

Whether you are a broker or not is irrelevant. You do not "work" for the real estate firm. If you receive payments on a 1099 you are an independent contractor. Only W-2 employees work for an employer. In which case you could not adopt a one-participant 401k.

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