you do know that this is a well known tax avoidance strategy right? The profits would be later used to offset the losses carried forward by the parent.
Are you an accountant/CPA or attorney?
Are you an accountant/CPA or attorney?
In lieu of penciling you a tax treatise, you may Google “wholly owned subsidiary tax strategies“. While there are no shortage of tax benefits, inevitably one of the elementary examples you find towards the top will be segregation of manufacturing and sales entities. Unfortunately you likely will not find much on more nuanced situations for example Wholly owned IC-Discs or LOB for wholly owned foreign entities (in many instances those situations can result in 0% US withholding and tax rates)