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Commissioner of Internal Revenue v. Mary Archer W. Morris Trust, North Carolina National Bank, Trustee
Court of Appeals for the Fourth Circuit (1966) | 367 F.2d 794; 18 A.F.T.R.2d (RIA) 5843; 1966 U.S. App. LEXIS 4807
TL;DR: A bank spun off its unwanted insurance business to its shareholders and then immediately merged with another bank. The court held that the initial spin-off was a tax-free reorganization, even though the distributing corporation did not survive the subsequent merger.
Legal Significance: This case established the validity of the "Morris Trust" transaction, permitting a tax-free spin-off of an unwanted business to be followed by a tax-free merger of the distributing corporation, provided a legitimate business purpose exists for the integrated transaction.