Individual investors have an incentive to defer selling appreciated stock until it qualifies for tax-favored, long-term capital gains treatment. Shackelford and Verrecchia [2002] show that these incentives can affect equity trading around public disclosures. This article provides some empirical...

<heading id="h1" level="1" implicit="yes" format="display">ABSTRACT</heading>The American Jobs Creation Act of 2004 (the Act) creates a temporary tax holiday that effectively reduces the U.S. tax rate on repatriations from foreign subsidiaries from 35% to 5.25%. Firms receive the reduced tax rate by electing to take an 85% dividends received deduction on...

We match large U.S. corporations' tax returns during 1989-2001 to their financial statements to construct a firm-level proxy of firms' use of off-balance sheet and hybrid debt financing. We find that firms with less favorable prior-period Standard & Poor's (S&P) bond ratings or higher leverage...