inversion
noun
, -shən\
Definition of inversion
Examples of inversion in a Sentence
Recent Examples on the Web
An inversion indicates that short-term bonds pay more than long-term ones, which signals a lack of investor faith in the economic outlook. — Mike Rogoway, oregonlive, "An Oregon recession? Unconventional trade war casts a shadow," 31 Aug. 2019 The collapse in long-term Treasury bond yields this year has pushed them below yields on shorter-term debt, an unusual situation known as an inversion of the yield curve. — Matt Phillips, New York Times, "S&P, Dow and Nasdaq Slide After China Tariff Threat and Trump Twitter Response," 23 Aug. 2019 That's because inversions of certain parts of the yield curve have often been predictors of American recessions. — Cnn Business Staff, CNN, "What is the yield curve and why it matters," 22 Aug. 2019 The last inversion of this part of the yield curve was in December 2005, two years before a recession brought on by the financial crisis hit. — NBC News, "Wall Street set to fall at opening bell after this major recession warning," 14 Aug. 2019 The sell-off in stocks Wednesday followed an inversion of the yield curve, meaning rates paid on short-term Treasury notes rose above long-term notes, suggesting that investors have little confidence in the economy right now. — Paul Bond, The Hollywood Reporter, "Media Stocks Hammered as Markets Plunge," 14 Aug. 2019 In a dataset of 16 other rich countries, reaching as far back as 1960, 51 of the 95 recessions were not preceded by an inversion during the previous two years. — The Economist, "Yield curves help predict economic growth across the rich world," 27 July 2019 In winter, cold, polluted air is trapped near the ground by an inversion: a layer of warmer air above that prevents the dispersion of pollutants. — Beth Gardiner, National Geographic, "Kids suffer most in one of Earth's most polluted cities," 26 Mar. 2019 After three of the last 10 inversions, the U.S. economy continued to grow over the next two years, UBS economists note. — Alain Sherter, CBS News, "3 reasons the U.S. economy isn't set to fall off a cliff," 20 Aug. 2019These example sentences are selected automatically from various online news sources to reflect current usage of the word 'inversion.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
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More Definitions for inversion
inversion
nounFinancial Definition of inversion
What It Is
Corporate inversion is practice by U.S.-based companies of exchanging their registration with a subsidiary outside the U.S. in order to pay lower taxes.
How It Works
Many large companies in the U.S. have smaller subsidiary companies located outside of the country. Called "offshore subsidiaries," these smaller companies are registered and taxable in the country in which they are located. Since the tax burden for some wholly-owned foreign companies can be significantly lower under these circumstances, the U.S.-based parent company may engage in corporate inversion, swapping registrations with its offshore subsidiary so it is taxed at a lower rate.
For example, if U.S.-based Company XYZ owns Subsidiary ABC, located in the Caribbean, and ABC is taxed at a lower rate, XYZ may use corporate inversion to switch its U.S. registration with the Caribbean subsidiary in order to lower its overall tax burden.
Why It Matters
Corporate inversion, while a legitimate tax strategy, has serious implications for the revenue collected by the Internal Revenue Service (IRS). With the growing popularity of corporate inversion in recent years, the IRS has made an effort to impose penalties and other deterrents upon companies that engage in this practice.
Source: Investing Answers
inversion
noun
English Language Learners Definition of inversion
See the full definition for inversion in the English Language Learners Dictionary
inversion
noun
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Medical Definition of inversion
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inversion
noun
\
Legal Definition of inversion
— called also corporate inversion, tax inversion
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