Est. 1998
Michael’s Estate Versus IRS
Michael’s Estate is suing the Internal Revenue Service over taxes and penalties assessed as a result of values reported on his federal estate tax return.
The federal estate tax exemption amount was $3,500,000 for decedents dying in 2009. That means that estate assets in excess of that amount are taxed.
For federal purposes, estate tax is calculated on the net value of the assets in the control of the decedent as of the date of death. There is an election available to use the values as of six months after the date of death, as well. That election is referred to as AVD, or alternate
valuation date, and is intended to account for the potential drop in the value of a decedent’s estate due to fluctuations in the market or a drop in the value of the businesses owned by the decedent. That drop can happen to ordinary taxpayers, but it’s not the case for Michael who remains firmly near the top of Forbes’ list of Top Earning Dead Celebrities.
Taxes payable as a result of the death of the decedent are the responsibility of the estate. Even though Michael’s will requires most of the taxes due to be paid out of his trust, the executors of the estate are legally responsible for filing and arranging for the payment
of taxes. That’s why, as a practical matter, the estate is suing the IRS. The case has been captioned (after an August 14, 2013 amendment) Estate of Michael J. Jackson, Deceased, John G. Branca, Co-Executor and John McClain, Co-Executor, Petitioner(s) v. Commissioner of Internal Revenue, Respondent (017152-13 U.S. Tax Court) and was filed in U.S. Tax Court.
To read more on this complex matter, please click here.
Source forbes.com & MJWN
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