The King of Pop may have passed, but debates over Michael Jackson’s life and death are alive and well. The latest: how much is Michael worth?
His estate says $7 million, but according to the Los Angeles Times, the Internal Revenue Service disagrees. The agency says Jackson’s estate is actually worth $1.125 billion — and has told his executors to pay up $505 million in taxes, and $197 million in penalties.
But the question of valuing intangible inheritances isn’t just “black or white”. Much of the debate over the pop star’s estate arises from the value of Jackson’s image. How lucrative a source of income is a dead celebrity’s likeness when used in T-shirts and television commercials? His estate has valued it at just $2,105, while the IRS has put it at just over $434 million, reports the Times.
A separate question in valuing Jackson’s estate is his interest in a trust that includes the rights to some of his songs and some of the most famous Beatles songs, including ”Yesterday,” “Sgt. Pepper’s Lonely Hearts Club Band” and “Get Back.” The IRS valued that at $469 million; the estate valued it at nothing.
“This is something unusual,” Katzenstein said. “He was one of the premier entertainers of our time. So there are really no comparables, and it leaves the valuation question open to a huge range of possibilities. Do I think his likeness was worth $2,105? No. But was it worth $400 million?”
The IRS’s estimate of the Jackson estate as being worth $1.125 billion comes along with a 20% penalty for undervaluation, after Jackson’s executors priced him at $7 million after his June 2009 death.
As the case unfolds in court, the Jackson estate may pay off its taxes by selling assets or asking the IRS if it could pay over 15 years, the L.A. Times reports. We’ll see if the IRS “can’t stop until it gets enough.”