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:
“Every library should try to be complete on something, if it were only the history of pinheads.”
—Oliver Wendell Holmes, Sr. (1809–1894)
“Regarding History as the slaughter-bench at which the happiness of peoples, the wisdom of States, and the virtue of individuals have been victimized—the question involuntarily arises—to what principle, to what final aim these enormous sacrifices have been offered.”
—Georg Wilhelm Friedrich Hegel (1770–1831)
“It gives me the greatest pleasure to say, as I do from the bottom of my heart, that never in the history of the country, in any crisis and under any conditions, have our Jewish fellow citizens failed to live up to the highest standards of citizenship and patriotism.”
—William Howard Taft (1857–1930)