Sloan: Yahoo changes direction, but those tax troubles could well follow

Yahoo CEO Marissa Mayer appears at TechCrunch Disrupt SF in 2013. | Courtesy of TechCrunch/Flickr
CEO Marissa Mayer and Yahoo are attempting to navigate a spin-off that’s tax friendly to the company and its shareholders. | Courtesy of TechCrunch/Flickr

It’s enough to make your head spin. Yahoo has managed the near-impossible, and has now made the enormously confusing situation that we discussed last week even more confusing.

The company said yesterday that it’s reversing its previous plan to stick a small Yahoo business and Yahoo’s 15 percent stake in Chinese Internet giant Alibaba into a new company and distribute its shares tax-free to existing holders.

The reason for the reversal is that the Internal Revenue Service refused to issue the ruling Yahoo had requested stating that the spin-off would be tax-free to both Yahoo and its shareholders.

So now, Yahoo says, it’s trying to get to the same place by a different route. It plans to stick its iconic Internet businesses and its 35 percent stake in Yahoo Japan into a new company, and distribute shares in that new company to Yahoo shareholders in a tax-free transaction.

Read more from the Washington Post


Allan Sloan is a columnist for The Washington Post. He is a seven-time winner of the Loeb Award, business journalism’s highest honor. View Archive


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