Abstract: IPOs of demutualized savings banks create tax sensitive shareholders with identical acquisition dates and tax bases. We investigate security volume and returns surrounding the one-year anniversary of the IPOs when unrealized capital gains and losses for original shareholders become long-term capital gains for taxation purposes. Trading volume levels confirmed our hypothesis that investors defer the recognition of capital gains, but we could not confirm that tax motivated trading affected security prices. The results have implications beyond taxation and US markets. For non-institutional investors, presumed to exhibit non-rationality, tax motivated trading exists and does not have a significant effect on prices.