Interested in training for your team? Click here to learn more

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

Recording of a 90-minute premium CLE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Wednesday, October 5, 2022

Recorded event now available

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.


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.



  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


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?


Bodoh, Devon
Devon M. Bodoh

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 A. Zywan

Principal, Corporate Tax

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

Access Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. All formats include course handouts.

To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Video