Structuring Spin-Offs: Reverse Morris Trusts, Section 355 Safe Harbors

A live 90-minute premium CLE video webinar with interactive Q&A

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Wednesday, October 5, 2022

1:00pm-2:30pm EDT, 10:00am-11:30am PDT

Early Registration Discount Deadline, Friday, September 9, 2022

or call 1-800-926-7926

This CLE webinar will examine the tax ramifications of spin-off and split-off transactions and how they can be structured to avoid taxation on the company or its shareholders. The panel discussion will include IRC Section 355, regulatory safe harbors, and Reverse Morris Trusts.

Description

Taxpayers can avoid federal income tax on corporate spin-offs under Section 355 of the Internal Revenue Code. Failure to meet the requirements of Section 355 either before or after the transaction can cause a spin-off to be taxable to the distributing parent company or the distributing parent's stockholders.

If 50 percent or more of the vote or value of a parent company is spun off as part of a "prohibited plan," the spin-off is taxable to the distributing parent. Any acquisition that occurs during the two years before or after a spin-off transaction may be deemed part of a prohibited plan, while an acquisition that fits within one of several regulatory safe harbors is not treated as part of such a plan.

An alternative to a "safe-harbor deal" is a transaction where former stockholders of the distributing parent continue to own more than 50 percent of the corporation involved in the spin-off. In a Reverse Morris Trust transaction, a merger partner merges with the distributing parent or spun-off subsidiary immediately after the spin-off in a tax-free transaction to achieve this result.

Listen as our authoritative panel discusses Reverse Morris Trust transactions and other structuring alternatives to avoid federal taxation on corporate spin-offs to the parent company or its shareholders.

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Outline

  1. Taxation of corporate spin-offs generally: to company, shareholders
  2. IRC Section 355
    1. Prohibited transactions
    2. Safe harbors
  3. Structuring a Reverse Morris Trust

Benefits

The panel will review these and other vital issues:

  • What kinds of spin-offs and split-offs are taxable to a company or its shareholders?
  • What safe harbors are available under Section 355 to avoid tax on a spin-off transaction?
  • How is a Reverse Morris Trust structured, and what are the pitfalls to be avoided?

Faculty

Bodoh, Devon
Devon M. Bodoh

Partner
Weil Gotshal & Manges

Mr. Bodoh advises clients on cross-border mergers, acquisitions, inversions, spin-offs, other divisive strategies,...  |  Read More

William S. Dixon
William S. Dixon
Managing Director
Citigroup Global Markets

Mr. Dixon is an investment banker and Managing Director at Citigroup Global Markets Inc., where he focuses on...  |  Read More

Zywan, Darin
Darin Zywan

Principal, Corporate Tax
KPMG

Mr. Zywan focuses on the federal income taxation of domestic and cross-border mergers, acquisitions, spin-offs, other...  |  Read More

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Early Discount (through 09/09/22)

You may pre-order a recording to listen at your convenience. Recordings are available 48 hours after the webinar. Strafford will process CLE credit for one person on each recording. All formats include course handouts.

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