A tactic in which a taxpayer waits to recognize revenues until the next tax year or attempts to recognize a deduction in the current tax year. Stop-and-go tactics are used in order to reduce one's tax liability in a given year. An example of a stop-and-go tactic is the purchase of a house in the current tax year in order to realize the first-time homeowner's tax credit. Another example is waiting to sell securities until the next tax year so that one can delay paying taxes on the profits.
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The tax reduction or deferment technique in which income and deductions are moved from one year to another. This technique involves advancing deductions and delaying income. For example, an investor may wait to recognize stock gains by selling early in the next year.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.