An empirical examination of tax factors and mutual funds' stock sales decisions

Steven Huddart, V. G. Narayanan

Research output: Contribution to journalArticlepeer-review

23 Scopus citations

Abstract

We examine whether taxes affect stock sales by mutual funds. For certain funds, the expected amount of a given stock sold in a given quarter is 62% greater when liquidation would trigger a capital loss equal to 1% of the value of the portfolio than when a like-size gain would be triggered, a greater effect than is associated with either contemporaneous excess stock returns of 50% or unexpected EPS equal to 50% of the stock price. For growth funds, responses to tax factors are consistent from year to year, and dispositions vary with the year-to-date realized gain.

Original languageEnglish (US)
Pages (from-to)319-341
Number of pages23
JournalReview of Accounting Studies
Volume7
Issue number2-3
StatePublished - Dec 1 2002

All Science Journal Classification (ASJC) codes

  • Accounting
  • Business, Management and Accounting(all)

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