Toshiba Breakup Poised to Benefit from Capital Gains Tax Break

When Toshiba Corp. announced its plan to join General Electric and Johnson & Johnson in the conglomerate break-up club, it did so with its eyes on tax breaks no major Japanese company had previously used.

Like GE, which says its split will be tax-free, Toshiba is undertaking a complex global reorganization in which it seeks to optimize its treatment by the fiscal authorities. To that end, it is looking to use a tax break for spin-offs—a kind that has only been used by much smaller companies so far—in its restructuring plan.

“The spin-off tax is designed to help companies ...