P Corporation owns all the stock of S Corporation, and P and S file a consolidated tax return. On January 1 of Year 2, P creates T Corporation and acquires all of its stock. P, S, and T report the following results for Years 1 through 3 (before any NOL deduction):

The group does not elect to forego any NOL carrybacks. Ignore the U.S. production activities deduction.
a. In what year(s) can the group deduct the Year 3 NOL?
b. Assume the same facts as in Part a except a third party created T in Year 2 and P acquires all of T€™s stock from the third party on January 1 of Year 3. Thus, Year 2 consolidated taxable income is $34,000 ($22,000 + $12,000). In what year(s) can the group deduct the Year 3 NOL?
c. Assume the same facts as in Part a except the group does not begin filing consolidated tax returns until Year 3. In what year(s) can the group deduct the Year 3 NOL?

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Taxable Income Year 1 $21,000 11,000 Group Member Year 2 Year 3 522,000 $23,000 12,000 13,000 10,000 50,000 Consolidated taxable inc ome S32,DOD $(14,000