Solo 401K Common Ownership

Hello,
Thank you for your help in advance.
I have a couple client. Husband owns a business with multiple employees and the wife owns the building in a separate entity to which the husband’s business pays a rent. She is the only employee and plans to stay that way.
The husband’s business is 100% owned by him and the wife business is 100% owned by her.

Question 1: Will this separation of ownership enable HER to set up a solo-k?

Questions 2: The wife is actually also taking a W2 from the husband’s company. Husband’s company doesn’t have any retirement plan. Would either husband or wife’s employment with each other’s company affect common ownership rules?

I initially thought she can set up a Solo K, but I was thinking this situation can be abused too. So, please share your expertise.
Thank you!



  1. Each spouse is considered to have the same ownership percentage in each other’s business as their spouse due to family attribution rules. These two business would be considered part of a controlled goup. Her business can not adopt a one-participant 401k plan.
  2. Only ownership interest affects controlled and affiliated group rules. 

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