MEMORIAL POLICY (AP) – The six-year legal battle over pop superstar Prince’s property has ended, meaning the process of distributing the artist’s wealth could begin next month.
The Minneapolis Star Tribune reports that the Internal Revenue Service and the estate’s administrator, Comerica Bank & Trust, agreed to value Prince’s property at $ 156.4 million, a figure that the artist’s heirs have also accepted.
The valuation dwarfs Comerica’s previous valuation of $ 82.3 million. By 2020, the Internal Revenue Service had estimated the estate at $ 163.2 million.
Prince, who died of an overdose of fentanyl in 2016, did not leave a will.
Since then, lawyers and consultants have been paid tens of thousands of millions of dollars to manage his property and come up with a plan for its distribution. Two of Prince’s six sibling heirs, Alfred Jackson and John R. Nelson, have since died. Two others are in the 80s.
“It’s been a long six years,” said L. Londell McMillan, a lawyer for three of Prince’s siblings, at a hearing Friday in Carver County District Court.
In the end, the estate is divided almost equally between a well-funded music company in New York – Primary Wave – and the three oldest of the music icon’s six heirs or their families.
The IRS and Comerica settled last spring on the property of Prince’s estate. But the more difficult task of valuing intangible assets such as rights to Prince’s music was not completed until October.
As part of the deal, the IRS dropped a $ 6.4 million “accuracy-related fine” it had imposed on Prince’s property. The Minnesota Department of Revenue, which agreed on the estate’s valuation, has also dropped an accuracy penalty, the case said.
Taxes on Prince’s fortune run into the tens of thousands of millions of dollars.
Just over $ 5 million of Prince’s property will be exempt from tax under federal law, but thereafter the tax rate is 40%. In Minnesota, the first $ 3 million is tax-exempt; then much of Prince’s property is likely to be taxed at 16%.
In mid-2020, Comerica sued the IRS in the U.S. Tax Court, saying the agency’s calculations of the value of the estate were fraught with errors. A tax lawsuit set for March in St. Louis. Paul, has been canceled due to the settlement.
Comerica said in a lawsuit Friday that even though the IRS settlement was “fair and equitable,” it believes it would have “won” the tax lawsuit. Comerica said it told Prince’s heirs that if lowering property taxes was their “primary interest”, they should continue to press the IRS and – if necessary – go to court.
“Instead, the members of the heirs’ group have uniformly announced (Comerica) their strong desire that the estate settle with the tax authorities,” the case states.