Microsoft and the Tax Reform Act of 1986

13 Pages Posted: 21 Oct 2008

See all articles by Mary Margaret Frank

Mary Margaret Frank

University of Virginia - Darden School of Business

Vishal K. Gupta

University of Alabama - Department of Management

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Abstract

Students analyze an employer and an employee's preferences for nonqualified stock options versus incentive stock options. Employer Microsoft issued large amounts of incentive stock options prior to its initial public offering (IPO), which occurred shortly before the Tax Reform Act of 1986 dramatically changed tax rates.

Excerpt

UVA-C-2186

Rev. Sept. 10, 2010

MICROSOFT AND THE TAX REFORM ACT OF 1986

William H. Gates III and Paul G. Allen formed a partnership in 1975 with a mission “to put a computer on every desk and in every home.” The partnership, now known as Microsoft Corporation (ticker: MSFT), developed system and application software for desktop computers.

Milestones of Microsoft's first 10 years include:

1975 Created software programs used on personal computers made by Apple, Tandy, and Commodore.

. . .

Keywords: Employee stock ownership tax issues

Suggested Citation

Frank, Mary Margaret and Gupta, Vishal K., Microsoft and the Tax Reform Act of 1986. Darden Case No. UVA-C-2186, Available at SSRN: https://ssrn.com/abstract=908085

Mary Margaret Frank

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4432 (Phone)
434-243-5021 (Fax)

HOME PAGE: http://www.darden.virginia.edu/faculty/frank.htm

Vishal K. Gupta (Contact Author)

University of Alabama - Department of Management ( email )

101 Paul W. Bryant Dr.
Box 870382
Tuscaloosa, AL 35487
United States

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