For ordinary income tax purposes, the component member rules are the most important factor mediating some of the harshness of the controlled group rules. They insure that foreign corporations are not part of controlled groups. They provide that a corporation cannot be part of more than one group at a time. They discuss how changes in the middle of a tax year are handled.
And none of them apply to qualified plans or other employee benefit issues — none of them.
Employee benefit practitioners need to understand the component member rules so they can recognize the differences between controlled groups recognized for tax returns and controlled groups as they exist for qualified plans. Understanding these rules will also highlight issues that practitioners frequently encounter in the controlled group arena.
 | Q 9:1 What is the significance of the component member rules for ordinary corporate income tax purposes? |
| Q 9:2 Where do we find the component member rules? |
| Q 9:3 Why do the component member rules not apply to qualified plans and other employee benefit plans? |
| Q 9:4 What are the component member rules? |
| Q 9:5 How can a corporation be excluded from being a component member of a controlled group? |
| Q 9:6 What is a franchised corporation that is excluded from being a component member of a controlled group? |
| Q 9:7 How does a corporation become an additional component member of a controlled group? |
| Q 9:8 Can a corporation be a component member of more than one controlled group? |
| Q 9:9 How are overlapping corporations handled for purposes of qualified plans? |
| Q 9:10 Are there particular problems with foreign corporations as a part of a controlled group? |
| Q 9:11 What are the consequences of eliminating the half year component member rules from the retirement plan arena? |