Abstract The article provides information on the study, Optimizing the Tax Results of the Complete Liquidation of a Closely Held Corporation--A Decision Model Approach, by Alan T. Attaway. This study combines traditional tax research techniques with macro-case analysis and computer modeling to develop an algorithmic decision-model. The computer model allows quick and efficient examination of the alternative plans of liquidation and chooses the plan of liquidation which results in the lowest total federal income tax to be paid by the parties in a complete liquidation. Such a model has a range of possible uses. One potential use is explored in this study. Two of the variables involved in the tax calculations for complete liquidations are examined to determine which, if any, are strong predictors of the best liquidation plan. A bivariate probit equation is derived using data generated by multiple runs of the model. The probit equation is analyzed and shown to be a statistically significant predictor of the best plan of liquidation.
Philip J. Harmelink (Sat,) studied this question.