Liquidation vs. retention: the personal holding company alternative.
The National Public Accountant › Vol. 37 Nbr. 4, April 1992
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Extract
Liquidation vs. retention: the personal holding company alternative.
Since the Tax Reform Act of 1986 (TRA 86) repealed the General Utilities doctrine, it has become more attractive to retain a liquidated corporation as a personal holding company (PHC). The main reasons are that the corporation can no longer avoid gain on liquidating sales and/or distributions, the dividend received deduction is still available to PHCs (albeit in reduced form), the PHC tax has been reduced dramatically and is still only imposed if there is "undistributed PHC income." However, the "liquidate or retain" decision is still not obvious, as demonstrated below.
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