I previously blogged about the income earned by Michael Jackson’s estate since his death. His estate is now embroiled in a dispute with the IRS over the value of his estate and the commensurate estate taxes owed. His estate representatives claimed a total estate value of $9 million on his estate tax return while valuing his image and likeness at only $2,000, while the IRS values the image and likeness at $434 million and the total estate at more than $1 billion.
1. This issue is different than paying income taxes on the earnings since his death. Those taxes have presumably been paid.
2. The IRS valuation seems very high while the estate value seems too low. MJ had borrowed extensively prior to his death to support his lifestyle, including his zoo, and was planning a series of London concerts to pay off the debt. The debt would reduce the value of his estate by $500 million or so.
3. I would love to negotiate with the estate and buy the right to market MJ’s image at their stated value of $2,000.
4. Estate taxes are levied on the value of assets at the time of death. At the time of his death, MJ was not listed as a billionaire by Forbes, had not had an endorsement since 1993, and was not on Forbes’ list of top earning musicians in 2008 the year prior to his death. No one could predict how popular he would be in death. Child molestation rumors, erratic behavior, dangling babies from balconies, and continual disfiguring plastic surgery have a way of frightening advertisers, shrinking a fan base, and reducing earnings.
5. The Police earned $115 million in 2008 and were Forbes top earning artist of the year. Huh?