4 ms·

Because it would be taxed at 40% vs the spin off which would mean absolutely no tax.

• jackgavigan 12y ago
  Do you have a source where I can read about the tax rules that apply?
  • charlesdm 12y ago
    Stock swaps and splits are generally tax exempt in most jurisdictions.
  • esturk 12y ago
    >http://www.bloombergview.com/articles/2015-01-28/yahoo-would-rather-not-pay-taxes-on-its-alibaba-shares http://www.bloombergview.com/articles/2015-01-28/yahoo-would... This article is helpful in understanding this spinoff. Namely it explains some pretty interesting requirements for this spin-off to happen. The company have to have a function (however lame like Halloween costume rental), and that there can't be any pre-arrangement for Alibaba to buy back the stock before the spin-off, etc.
    • jackgavigan 12y ago
      Good article. Thanks for the pointer.