History
The original Morris Trust structure was the result of a favorable ruling in IRS v. Morris Trust in 1966. The original Morris Trust structure is similar to the above Reverse Morris Trust structure, however instead of a former subsidiary merging with a target company, the parent company would merge with target company.
Following several leveraged Morris Trust transactions similar to the original Morris Trust transaction, but involving cash and bank loans rather than mere stock, Congress enacted Internal Revenue Code Section 355(e) in 1997. This imposes additional taxation on the distribution in the spin-off step whenever 50% interest in a spun off company is transferred tax-free in the two years following a spin-off.
Read more about this topic: Reverse Morris Trust
Famous quotes containing the word history:
“There has never been in history another such culture as the Western civilization M a culture which has practiced the belief that the physical and social environment of man is subject to rational manipulation and that history is subject to the will and action of man; whereas central to the traditional cultures of the rivals of Western civilization, those of Africa and Asia, is a belief that it is environment that dominates man.”
—Ishmael Reed (b. 1938)
“America is the only nation in history which, miraculously, has gone directly from barbarism to degeneration without the usual interval of civilization.”
—Attributed to Georges Clemenceau (1841–1929)
“The myth of independence from the mother is abandoned in mid- life as women learn new routes around the mother—both the mother without and the mother within. A mid-life daughter may reengage with a mother or put new controls on care and set limits to love. But whatever she does, her child’s history is never finished.”
—Terri Apter (20th century)