Estate of Michael Jackson sues the IRS
Michael Jackson’s estate is suing the IRS over valuation. According to Kelly Philips Erb, writing in Forbes, assets causing the problem include amounts attributable to the singer’s likeness and intellectual property. It will all come down to what subsequent events should have been foreseen and accounted for in a valuation at the date of death.
Erb reports the estate has two valuations, estimated between $80 million and $500 million. Everything over $3.5 million is subject to federal estate taxes. At the time of death, Michael Jackson was heavily in debt, and his earning power could not match his spending. Who knew after death Michael Jackson’s estate would outearn any living artist?
Valuators might find the arguments instructive. The case is Estate of Michael J. Jackson, Deceased, John G. Branca, Co-Executor and John McCain, Co-Executor, Petitioner(s) v. Commissioner of Internal Revenue, Respondent (017152-13 U.S. Tax Court).