Zayo’s Not-So-Taxable ‘Taxable’ Real Estate Spinoff

Zayo Group Holdings Inc.’s “taxable” spinoff may not be so taxable after all, and the transaction may leave it with much lower taxes for the foreseeable future.

The Boulder, Colo.-based communications infrastructure multinational announced Nov. 7 that it is splitting into two companies with different business segments, and that gains from the transaction will be taxable to Zayo.

But only the company’s shareholders will face a tax on that gain, as Zayo has enough net operating losses from prior years—$1.9 billion, per its most recent annual financial filing—to effectively make the transaction tax-free to ...