MINNEAPOLIS – The six-year legal battle over pop superstar Prince’s estate has ended, meaning the process of dividing the artist’s fortune could begin next month.
The Minneapolis Star Tribune reports that the Internal Revenue Service and the estate’s administrator, Comerica Bank & Trust, have agreed to value Prince’s estate at $156.4 million, a figure that his heirs Artists have also accepted.
The valuation differs from Comerica’s previous $82.3 million valuation. The Internal Revenue Service in 2020 valued the property at $163.2 million.
Prince, who died of a fentanyl overdose in 2016, left no will.
Since then, attorneys and consultants have been paid tens of millions of dollars to manage his estate and devise a plan to distribute his estate. Two of Prince’s six heirs, Alfred Jackson and John R. Nelson, have passed away. Two others were in their 80s.
“It’s been a long six years,” L. Londell McMillan, attorney for Prince’s three siblings, said at a hearing Friday in Carver County Court.
Ultimately, the fortune will be split roughly equally between a well-funded New York music company – Primary Wave – and the three oldest of the six heirs of the music or family icon. their.
The IRS and Comerica settled last spring on the portion of the estate in Prince’s estate. But the more complex task of valuing intangible assets like Prince’s music rights wasn’t completed until October.
As part of the settlement, the IRS reduced the $6.4 million in “accuracy-related penalties” it levied on Prince’s estate. The Minnesota Department of Revenue, which agreed on real estate valuations, also dropped an accuracy penalty, the filing said.
Taxes on Prince’s estate would run into the tens of millions of dollars.
Just over $5 million in Prince’s estate will be tax-free under federal law, but then the tax rate is 40%. In Minnesota, the first $3 million is tax-free; After that, most of Prince’s estate would likely be taxed at 16%.
In mid-2020, Comerica sued the IRS in U.S. Tax Court, saying the agency’s calculations of the value of real estate were flawed. A tax hearing scheduled for March in St.Paul has been canceled due to settlement.
Comerica, in a court filing Friday, said that while the IRS’s settlement is “fair and reasonable,” it believes it will “win” in the tax case. Comerica said it told Prince’s heirs that if reducing estate taxes was in their “primary interest,” they should continue to press the IRS and – if necessary – bring to trial.
“Instead, members of the inheritance group unanimously informed (Comerica) of their strong desire that the estate would settle with tax authorities,” the filing said.
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