Page 350 - Large Business IRS Training Guides

Example 7 – Within Phase-In Range

Comprehensive Example

Fred, who is single, wholly owns four S corporations;

a restaurant, accounting firm, gas station, and

bakery. All businesses share centralized

bookkeeping and payroll services. The bakery sells

a majority of its goods to the restaurant. Fred

chooses to aggregate the restaurant and bakery.

• Fred meets the 50% ownership test, and

• Meets 2 of the 3 tests required to aggregate:

• Share significant centralized business elements, and

• Operated in reliance upon each other.

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