I'll make it even simpler. You can't do any of the shortcuts. You must run the grounds and neutrals along with the hot wires together. You can't merge them, you can't leave them terminated in the other panel.

Further you do know about the derating requirements for running multiple current carrying conductors in the same conduit?

I was looking at wiring diagrams for prewired transfer switches and they do exactly what I want to do. Take the hot wire off the breaker and connect it to the transfer switch which contains a breaker but they leave the neutrals and grounds where they were. So are they also wrong? I am not aware of the derating current when using a conduit but I suppose it has to do with "back emf" or eddy currents. I will have less than 15 feet of conduit and thought it easier & neater than running 12 NM cables. However I can just run 12 black(hot), 12 white(neutral) & 12 green (ground) in my 1 1/4 conduit. Or are you suggesting 3 separate conduits for each type of run?

All the conductors for a circuit need to be run together. I have no idea what you're describing, I've never seen a transfer switch wired like that.
The derating primarily has to do with heat. You also can't put that many wires in the conduit. I don't know if you're running PVC or EMT or what but you're going to be limited to 14-17 #12 wires.

I

Hi,

I think that the connection of the (a) neutral, (b) ground, (c) transfer switch and (d) generator bonding and grounding are interelated.

Some transfwer switches switch the neutral, some do not. It is equipment and site dependent. Rather than confuse you with my expanation, here are two write ups from Cummins generators which explain the issues.

http://www.cumminspower.com/www/literature/technicalpapers/PT-6005-GroundingAC-1-en.pdf

http://www.cumminspower.com/www/literature/technicalpapers/PT-6006-GroundingAC-2-en.pdf

Hope this is useful.

Warmest regards, Mike.

His questions have nothing to do with whether or not his neutral gets switched. The code prohibits just about everything he wants to do: not run the neutrals and grounds, merge the neutrals, run 12 (or 24) current carrying wires in the same conduit without derating, exceeding the conduit fill rules, etc...

He needs definite assistance in at least the design of what he's trying to do.

Thank you ronnatalie, I have learned a lot and have rethought the project. I will now use 12/2 WG for each run, no conduit. I'll feed the input of the transfer switch from a sub-panel which is now next to where I am putting this panel & has plenty of amperage available. I have learned about bonding and no bonding of the grounds in sub-panels. In fact my main panel may be incorrectly bonded because there is a 200 amp breaker at the meter. I'll check into this and make the necessary changes if needed. I guess this is what forums like this one are all about.
Michael