This is a much more detailed explanation of why the spin-out saves on taxes: http://www.bloombergview.com/articles/2015-01-28/yahoo-would-rather-not-pay-taxes-

This is a much more detailed explanation of why the spin-out saves on taxes: 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... It also suggests that at some point, after some time has gone by, Alibaba will find it a no-brainer to buy the spin-out.