Michael Jackson's Estate Tells the IRS to Beat It!

Michael Jackson's Estate for tax purposes is not Black or White, but decidedly a shade of grey. A $700 million deficiency exists between the amount the 2009 Jackson Estate paid and how much the IRS believes it should have paid. How could such a difference in calculations of taxable estate interest exist? Let your friendly Florida tax attorney take a good look at it:

Unfortunately for his heirs, Michael Jackson did not expire in 2010 when the estate tax was zero due to an anomaly in the law. In 2009, when the King of Pop passed, the Federal estate tax exemption was $3,500,000 for decedents. Therefore, all assets in excess of the 2009 exempted amount would have been taxable.

Estate taxes are calculated using the net value of assets that a decedent has in their control at the time of death. Interestingly, an estate may opt to use the 'alternate value date' which is the value of the assets as of six months after the time of death. The purpose of this option is to account for any meaningful drop in value of the estate due to market fluctuations or business devaluation.

Categories: