With the impending sale of Yahoo's core assets, the internet giant's last remaining crown jewel is its valuable stake in Alibaba.  The company has a 15 percent stake in the Chinese e-commerce firm, not to mention its 35.5 percent stake in Yahoo Japan, which it co-owns with Japan's Softbank. The assets total $40 billion and will be held by the residual firm known for the meantime as Remain Co.

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Yahoo is not in a hurry to unload its Alibaba shares, at least for now, director Tom McInerney told Forbes. In fact, the company is expected to retain the shares indefinitely without any "current intent" to sell in a taxable deal. McInerney said that Yahoo wants to keep "the pre-tax value" of these shares. Yahoo will foot a hefty tax bill if it chooses to dispose of these shares since Alibaba's value has risen to exponential heights over the years, which means it will have to pay capital gain taxes which are worth billions of dollars.

The company attempted to spin off its Alibaba stake into a separate firm through a new entity called Aabaco Holdings but had to back out from the plan as tax regulators gave no assurance that the move would be tax-free. The move dealt a heavy blow to Yahoo CEO Marissa Mayer's effort to return cash to shareholders.

One of the strategies that might work is for Yahoo Japan, and Alibaba is to buy back their stakes from Yahoo to minimize the tax bill. The move is expected benefit Yahoo shareholders even if the deal might come at a discounted price, Eric Jackson, managing director of SpringOwl Asset Management, told Fortune. SpringOwl owns shares in Yahoo.

If Alibaba decides to buy back its shares from Yahoo, it is expected that it might ask for a discount.  

"We believe that if Alibaba were to purchase its shares from Yahoo, it would demand a discount to the market price," Morningstar analyst Ali Mogharabi explained in an interview with Forces.

However, Paul Gillis of Peking University believes that Alibaba does not seem interested in buying back its shares from Yahoo, at least for now. 

TagsYahoo, Alibaba