Yahoo has thrown out plans to spinoff their share in Alibaba, worth about $31 billion USD. 

Shares in the California-based company have jumped over 2.7 percent in after-hours trading following the announcement. 

It’s the climax to an 11-month debate over whether Yahoo would be able to separate their core business from the Alibaba stake without incurring a massive tax bill. Yahoo’s core business has an estimated worth of less than $2 billion USD, with the rest of the company’s value tied up in Alibaba as well as Yahoo Japan Corp. and some cash holdings. 

The U.S. company will now consider selling its core business as an alternative to the spinoff, including their search and display advertising services. Yahoo declined to comment on the latest developments.

In February CEO Marissa Mayer was adamant that the spinoff would not incur a tax under current U.S. regulations. Authorities have since refused to give guidance on whether the spinoff would be taxed. In September Yahoo disclosed in a filing that the IRS had decided to not grant approval for a tax-free spinoff, though at the time the company stated they would continue to pursue the move.

Last month activist investor Starboard Value threatened Yahoo with a proxy fight if  they refused to drop the spinoff plans.  At the time Starboard’s CEO Jeff Smith penned a strongly-worded letter stating that Starboard will “look to make significant changes to the board if you continue to make decisions that destroy shareholder value.”

While Starboard originally supported the move, they have since urged the company to sell of their core business in view of tax concerns. The Alibaba stock within the potential spinoff company would likely trade at less than other U.S.-listed Alibaba stock given the risks of heavy taxation.

Yahoo’s core business business has suffered over the past few years, as Ms. Mayer struggles to stem the company’s falling revenue. Yahoo’s stock price has dipped by 32% this year.

Update (9/12/15) 11:23: We updated this post to reflect the fact that Yahoo declined to comment.