If you are thinking of investing in Reverse Morris Trusts, you are recommended to develop a sound investment strategy, just like you would for any other investments. However, some investors may not know where to start or what to look at. That’s where The Edge comes in. We provide reliable Reverse Morris Trust investment research solutions so that you can make the most prudent investment decisions with our help.
The Edge | What Are Reverse Morris Trusts?
When a company has plans for a spinoff and sells assets to an interested party afterwards, it may utilize a tax-optimization strategy called a Reverse Morris Trust. This strategy allows that company to avoid taxes on any gains that are a result of asset disposal. Reverse Morris Trusts are also a form of organization that allows one entity to combine a spun-off subsidiary in a strategic merger with another entity free of taxes (this is only applicable if all the legal requirements for the spinoff procedure have been met). Reverse Morris Trusts were the result of a ruling in a lawsuit against the U.S. Internal Revenue Service in 1966.
The Edge | Notable Features Of A Reverse Morris Trust
- Stockholders of the parent company own a minimum of 50% of the value and stock of the merged or combined firm.
- Reverse Morris Trusts are widely favored by third-party companies (they may be smaller than or similar in size to the spun-off subsidiary).
- Third-party companies in this type of trust enjoy more flexibility when appointing senior management or controlling its board of directors.
The Edge | How Do Reverse Morris Trusts Work?
If you are new to Reverse Morris Trusts, here’s a closer look at how it works:
The Reverse Morris Trust normally begins with a parent company selling assets to a third-party company. The parent company proceeds to create a subsidiary, which then merges with that third-party company to form a company that’s unrelated. This newly formed company then issues shares to existing shareholders of the original parent company. With that, a reverse Morris trust is complete when those shareholders control more than 50% of the economic value and voting rights in the unrelated company. In other words, the parent company has effectively transferred its assets, without taxation, to the third-party company.
The Edge | Why Choose Us for Reverse Morris Trust Research & Analysis?
The Edge was founded in 2005 and we have been providing stellar investment research services for over a decade. Our research firm is backed by a team of strong, committed analysts that have unmatched experience in this field. When you work with us, you will get extensive reports that help you see a wider range of investment opportunities, including those in Reverse Morris Trusts. What’s more, you no longer need to deal with mainstream research that is normally too long-winded or shallow. With our accountable track record of providing significant Return on Investment to our clients and an +8.5% alpha alpha, you will benefit greatly from our actionable insights.
If you are looking for a reputable investment researcher that specializes in Reverse Morris Trusts, The Edge is here to help. Contact The Edge team today to get started!