Suppose you are a CPA, and you have a corporate client that has been operating for several years. The company is considering expansion through reorganizations. The company currently has two subsidiaries acquired through Type B reorganizations. The client has asked you for tax advice on the benefit of a Type A, C, or D reorganization over a Type B reorganization. Additional facts regarding the issues are reflected below.

• The company currently files a consolidated income tax return with the two subsidiaries acquired through a Type B reorganization.
• ABC Corporation, a subsidiary targeted by the client for takeover, has substantial net operating losses.
• XYZ Corporation and BB Corporation will be acquired as subsidiaries in the next six months.

1. Propose a taxable acquisition structure for the client's planned acquisitions over a nontaxable reorganization. Assess the value of a taxable transaction over a nontaxable reorganization for the client.
2. Examine the value and limitations of including the ABC Corporation if acquired as a wholly owned subsidiary in the consolidated return and provide a recommendation to your client. S
3. Create a scenario that will allow the client to reduce any disadvantages from filing a consolidated return as a member of a controlled group.