IRS says executors undervalued Prince's estate by 50%
Original report: IRS says Prince's estate undervalued by 50%, triggering another dispute in settlement (Star Tribune)
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Source: Associated Press
[div class=except]IRS says executors undervalued Prince’s estate by 50%
January 3, 2021
MINNEAPOLIS (AP) — The ongoing controversy over the money left behind by Prince when he died without a will is heating up again after Internal Revenue Service calculations showed that executors of the rock star’s estate undervalued it by 50%, or about $80 million.
The IRS determined that Prince’s estate is worth $163.2 million, overshadowing the $82.3 million valuation submitted by Comerica Bank & Trust, the estate’s administrator. The discrepancy primarily involves Prince’s music publishing and recording interests, according to court documents.
Documents show the IRS believes that Prince’s estate owes another $32.4 million in federal taxes, roughly doubling the tax bill based on Comerica’s valuation, the Star Tribune reported.
The IRS also has ordered a $6.4 million “accuracy-related penalty” on Prince’s estate, citing a “substantial” undervaluation of assets, documents show.
Prince’s death of a fentanyl overdose on April 21, 2016, created one of the largest and most complicated probate court proceedings in Minnesota history. Estimates of his net worth have varied widely, from $100 million to $300 million.
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Read more: https://apnews.com/article/personal-taxes-minneapolis-prince-a34f51e018bc47421c268d723217f933
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Source: Star Tribune
By Mike Hughlett Star Tribune JANUARY 2, 2021 — 4:30PM
The Internal Revenue Service claims the executors of Prince's estate have lowballed its value by 50%, or about $80 million, triggering a dispute that could prolong the late musician's already tortuous and expensive probate proceedings.
The IRS determined that Prince's estate is worth $163.2 million, well above the $82.3 million valuation submitted by Comerica Bank & Trust, the estate's administrator. The big gap primarily involves Prince's music publishing and recording interests.
In the IRS' view, Prince's estate owes another $32.4 million in federal taxes, roughly doubling the tax bill based on Comerica's valuation, according to documents filed in U.S. Tax Court.
"This is a large discrepancy, both in terms of the dollars involved and the fact that the IRS thinks the estate is worth twice as much," said Michael Smith, an estate planning attorney at Larkin Hoffman in Minneapolis who's not involved in the case.
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Read more: https://www.startribune.com/irs-says-prince-s-estate-undervalued-by-50-triggering-another-dispute-in-settlement/600006126/
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