Intra-Group, Interstate Strategic Income Management for Tax, Financial Reporting, and Regulatory Purposes

35 Pages Posted: 8 Feb 2000

See all articles by Anne Beatty

Anne Beatty

Ohio State University (OSU) - Department of Accounting & Management Information Systems

David G. Harris

Syracuse University - Joseph I. Lubin School of Accounting

Date Written: January 2000

Abstract

In this paper we examine how the realizations of securities gains and losses by banks owned by an interstate multibank holding company are related to the tax, earnings, and capital management objectives of the consolidated group and of the individual subsidiaries. We find that while subsidiary banks manage their gain realizations to reduce their own state tax, they also behave strategically with respect to their tax cost in relation to other members of their consolidated group so as to reduce the groups'state tax expense. We find evidence suggesting that banks also use the realization of securities gains and losses to manage their subsidiaries' earnings, and that they coordinate their gains and losses to manage the earnings of the group.

JEL Classification: G21, H25, M41, M43

Suggested Citation

Beatty, Anne L. and Harris, David G., Intra-Group, Interstate Strategic Income Management for Tax, Financial Reporting, and Regulatory Purposes (January 2000). Available at SSRN: https://ssrn.com/abstract=206070 or http://dx.doi.org/10.2139/ssrn.206070

Anne L. Beatty (Contact Author)

Ohio State University (OSU) - Department of Accounting & Management Information Systems ( email )

2100 Neil Avenue
Columbus, OH 43210
United States

David G. Harris

Syracuse University - Joseph I. Lubin School of Accounting ( email )

Whitman School of Management
721 University Ave
Syracuse, NY 13244-2130
United States
315-443-3362 (Phone)
315-443-5457 (Fax)

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