Tax free spinoffs are the main vehicle to transfer value to the shareholder without the shareholder being taxed and without the corporation being taxed. Generally, under the IRC, all increases in wealth through distributions or sales or exchanges are taxable unless the taxpayer finds an IRC provision which exempts the income or defers the income recognition. IRC section 355 is such a tax deferred provision.

Course Key Contents: Corporate Business Purpose, Continuity of Interest, Active Trade or Business, The Device Limitation, Control, Debt Assumption, Split Stock Options, Prorata v. Nonprorata Spinoff, Anti Morris Trust Rules, Safe Harbor Exception to Anti Morris Trust Rules, IRS Revenue Procedure to Obtain Private Letter Ruling

Learning Objectives
  • Explore the congressional intent underlying IRC Section 355.
  • Identify the required rules for executing a tax- free spinoff.
  • Discover the onerous tax consequences if the spinoff does not qualify as tax- free under IRC section 355.
  • Recognize what is required to obtain a favorable private letter ruling from the Internal Revenue Service and what the ruling does not cover.
Last updated/reviewed: August 12, 2023
4 Reviews (20 ratings)


Anonymous Author
Good course. Supporting materials were relevant and the course met the intended learning objectives.

Anonymous Author
Decent course- well written and clearly explained. Slides are helpful and clear.

Member's Profile
Ira's course on fundamentals of tax free spinoff was well presented.

Anonymous Author
Great course and content. Very informative. I recommend it!

Course Complexity: Intermediate
  • Although advanced preparation is not required for this course, a read through of IRC section 355 is helpful.
Education Provider Information
Company: Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact: For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Instructor for this course
Course Syllabus
  Introduction to Fundamentals of Tax Free Spinoffs4:51
  Non Tax Corporate Benefits of Tax Free Spinoffs4:51
  Pre-Spinoff Inter-Company Agreements9:57
  Adverse Tax Consequences If IRC Section not Satisfied8:06
  Requirements of IRC Section 355 for Tax Free Spinoffs16:02
  Favorable Tax Results If Spinoff Meets Requirements of IRC Section 3555:20
  Understanding The Anti-Morris Trust Rule For Tax Free Spinoffs10:38
  The Safe Harbor Exception to The Anti Morris Rules6:42
  Private Letter Rulings for Tax Free Spinoffs9:18
  Summary 3:15
  Fundamentals of Tax Free Spinoffs1:10:58
  Slides: Fundamentals of Tax Free SpinoffsPDF
  Fundamentals of Tax Free Spinoffs Glossary/IndexPDF