Date of this Version
Journal of Accounting Research
This paper defines an intertemporal tax discontinuity (ITD) as a circumstance in which different tax rates are applied to gains and losses realized at one point in time versus some other point in time, and studies the effects of ITDs on market behaviors at the time of disclosures of firm performance. The results show that ITDs either depress or amplify trading volume at the time of disclosure, depending upon whether the disclosure is “good news” or “bad news,” repectively, and lead to “overreactions” in price changes independent of the “news.”
This is the peer reviewed version of the following article:Shackelford, Douglas A., and Verrecchia Robert E. "Intertemporal Tax Discontinuities." Journal of Accounting Research 40.1 (2002): 205-22. Web., which has been published in final form at http://www.jstor.org/stable/3542435. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving http://olabout.wiley.com/WileyCDA/Section/id-820227.html#terms.
Shackelford, D. A., & Verrecchia, R. E. (2002). Intertemporal Tax Discontinuities. Journal of Accounting Research, 40 (1), 205-222. Retrieved from https://repository.upenn.edu/accounting_papers/51
Date Posted: 27 November 2017
This document has been peer reviewed.