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Toshiba, which separated out the unit in April as a prelude to a
sale, said it was being taxed on the basis of assets and
liabilities of the transferred business at the time of the
split.
The latest forecasts, however, do not reflect expected gains
from the 2 trillion yen ($17.6 billion) sale as the deal has yet
to receive regulatory approval.
Toshiba said that due to the tax impact, it expects a loss of
110 billion yen ($970 million) in the year to March, instead of
its previously forecast profit of 230 billion yen.
It kept its annual revenue and other profit forecasts unchanged.
Toshiba, desperate for funds to cover liabilities arising from
it U.S. nuclear unit Westinghouse, agreed last month to sell the
unit - the world's second biggest producer of NAND flash memory
chips - to a group led by Bain Capital.
A highly contentious auction meant that a decision on the buyer
took much longer than expected, and Toshiba has run the risk of
not getting anti-trust clearance before the end of the financial
year in March as regulatory reviews usually take at least six
months.
If it doesn't get the deal done in time, it could end the year
in negative net worth for a second year in a row, putting
pressure on the Tokyo Stock Exchange to delist it.
(Reporting by Junko Fujita; Editing by Chang-Ran Kim and Edwina
Gibbs)
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