IRS ruling raises uncertainty about Yahoo's Alibaba spinoff
SAN FRANCISCO (AP) — A crucial deal for Yahoo has hit a snag after the IRS refused to bless the Internet company's proposed spinoff of its $23 billion stake in Alibaba Group as a tax-free transaction.
Despite the rebuff, Yahoo emphasized Tuesday that the IRS didn't rule out the possibility that the spinoff could still be completed without triggering taxes on the profits that the company has accumulated from its initial $1 billion investment in Alibaba, which runs some of China's most popular online services.
The IRS's indecision raises uncertainty about the value of Yahoo's most prized asset and could intensify pressure on CEO Marissa Mayer to boost the company's slumping stock.