are reverse morris trusts commonly used 
only a few reverse morris trusts are used each year part of the reason for this is that certain irs requirements apply to rmts such as only certain companies can apply and they must have generated positive income in the five years prior to the transaction the bottom linea reverse morris trust is a transaction in which one company sells off unwanted assets by transferring them to a subsidiary and immediately merging that subsidiary with a third party company that wants to buy it the parent company and its shareholders incur no federal income tax liability as a result the rmt offers a tax efficient way to create value for shareholders of the parent company as well as the third party company 