Is a Reverse Morris Trust good for shareholders?

Tax-efficient divestiture – Disposing of a subsidiary or assets results in potentially high taxable gains. The Reverse Morris Trust allows a parent company to eliminate any tax and distribute the asset to its current shareholders.

Is a Reverse Morris Trust tax-free?

A reverse Morris trust is a strategic way to divest a division tax-free, provided that all legal requirements are met.

What is a reverse Morgan Trust?

From Wikipedia, the free encyclopedia. A Reverse Morris Trust in United States law is a transaction that combines a divisive reorganization (spin-off) with an acquisitive reorganization (statutory merger) to allow a tax-free transfer (in the guise of a merger) of a subsidiary.

What is a RMT structure?

An RMT is a structure in which a company spins off a business to its shareholders, and the divested business is then acquired by another company. For the transaction to remain non-taxable, the shareholders of the divested business must retain more than 50% of the value and voting rights of the combined entity.

What is a reverse gift transaction?

The idea of “reverse” gifting is rooted in the assumption that neither the donor (mother) nor the donee (daughter) will be subject to the federal estate tax. When an individual passes away, the basis of his or her assets are stepped-up to fair market value on the individual’s date of death.

What is a reverse spinoff?

Large entities create a new entity by selling new stocks of their existing business. This arrangement results in a legal new entity. In some cases, the newly established entity may fulfill certain criteria that can be termed as a reverse spinoff.

What is a reverse merger deal?

A reverse merger is when a private company becomes a public company by purchasing control of the public company. The shareholders of the private company usually receive large amounts of ownership in the public company and control of its board of directors.

What does RMT mean?


Acronym Definition
RMT Registered Massage Therapist
RMT Resistant Materials Technology (course)
RMT Resource Management Tool
RMT Registered Medical Technologist

What is a reverse spin off?

The so-called “reverse spin-off” is an alternative way of separating the Alibaba stake — so Yahoo’s other assets and liabilities would be exported into a new company. This could effectively spell the end of Yahoo as we know it.

Can you reverse a gift?

Like other deeds, a gift deed conveys property title from one individual to another. If you change your mind afterward, or someone challenges the title transfer, it will be difficult to reverse the gift unless you set up that option ahead of time.

What is the difference between spin off and split off?

The spin-off is a divestment strategy in which the parent company is divided into a new subsidiary which is independent in legal matters from the parent company. Split-off, on the other hand, is a restructuring strategy in which the shareholders of the new subsidiary are the former shareholders in the parent company.