This study examines the effect of tax‐rate‐based holding period incentives on individual investors' earnings release period selling decisions using selling activity proxies computed from intra‐day transaction data. We find evidence that earnings release period selling activity, for a given level of past stock price appreciation (depreciation), is lower (higher) when the magnitude of the tax‐rate incentive to hold long term is larger. The results are, however, sensitive to the time period used to compute the past stock price change variable. Although we report results consistent with income tax considerations influencing individual investors' selling decisions, the results cannot be definitively attributed to holding period incentives.
Do Holding Period Tax Incentives Affect Earnings Release Period Selling Activity of Individual Investors?
- Views Icon Views
- Share Icon Share
- Tools Icon Tools
- Search Site
David N. Hurtt, Jim A. Seida; Do Holding Period Tax Incentives Affect Earnings Release Period Selling Activity of Individual Investors?. Journal of the American Taxation Association 1 September 2004; 26 (2): 43–64. doi: https://doi.org/10.2308/jata.2004.26.2.43
Download citation file: