Decision Trees: A Frame Work for Analyzing State Income Tax Net Operating Loss Utilization

The Bloomberg BNA Tax Management Weekly State Tax Report filters through current state developments and analyzes those critical to multistate tax planning.

Many companies facing the expiration of net operating losses can benefit from tax planning that systematically analyzes alternative courses of action and the uncertainties accompanying these alternatives. In this article, Michael Salama of the Walt Disney Co. suggests the use of decision trees as a method for explicitly analyzing possible future events and decisions, making the point that the techniques and constructs involved in this type of decision modeling can be easily applied to many tax scenarios.