Discussion Question $8-9($LO$.3,7,10)$

Classify each of the following scenarios $("$Probably a good match" $/$ "Probably not a good match" $/"$No effect on consolidation"$)$ regarding consolidated return partners in computing the affiliated group's Federal income tax. Consider Federal income tax implications only; the pairing could still be favorable after considering non$-$tax considerations.

a$.$SubCo has a number of appreciated assets that it wants to sell to its parent, Huge Corporation.

Probably a good matchProbably not a good matchNo effect on consolidation

$$b$.$SubCo has a number of assets that it wants to sell to its parent, Huge. The assets have declined in market value since SubCo purchased them.

Probably a good matchProbably not a good matchNo effect on consolidation

$$c$.$ParentCo uses cost depletion in accounting for its natural resources, whereas SubCo wants to continue to claim percentage depletion.

Probably a good matchProbably not a good matchNo effect on consolidation

$$d$.$ParentCo uses a calendar tax year, whereas SubTwo has been using a September $30$ tax year$-$end.

Probably a good matchProbably not a good matchNo effect on consolidation