Spinning Morris Trust: Interpreting 355(E) According to its Purpose
21 Pages Posted: 23 Mar 2002
This report describes and compares from a tax policy perspective two well-known spinoff-acquisition transactions: The innocent Morris Trust transaction and the abusive Viacom transaction. It examines alternatives to section 355(e) as enacted by Congress and closely examines the statutory language for vagueness that ought to be addressed in the Treasury regulations. The bulk of this paper is Part IV, which summarizes and critically evaluates both the sets of proposed regulations and the temporary regulations. Part V concludes that the temporary regulations are overbroad because instead of targeting abusive Viacom-like transactions specifically, they ensnare many perfectly innocent post-spin acquisitions.
Keywords: spin-offs, tax-free reorganizations, Morris Trust, I.R.C. Sec 355(e)
JEL Classification: H20, H25, H26, K34
Suggested Citation: Suggested Citation