The IRS and the estate are having to reconcile different estimates.
Like many creative legends, Whitney Houston had a tragic and sudden passing.
She also had a successful career.
This success garnered her significant income and assets.
Even after her death, her estate is still making money.
Although she died five years ago in 2012, there is still contention on her estate tax, according to a recent WealthAdvisor article titled “IRS Squeezing Whitney Houston’s Estate for $11 Million In Back Taxes.”
There is a significant disparity between what the estate believes it owes in estate taxes and what the IRS is demanding.
This sounds all too familiar, yes?
Can you say Michael Jackson or Prince (or, is it the "Artist formerly known as Prince")?
How large is the disparity?
The IRS has calculated the bill to be at least $11 million.
The IRS states there are more than $22 million in untaxed royalties while the estate clocks the number at closer to $2 million.
This a pretty significant gap.
Where did the IRS get its $11 million bill?
They calculated the asset of Whitney Houston’s "image and likeness" to be quite high.
It is difficult to say exactly how much revenue could be made from this asset.
Because it is intangible, these calculations can be quite relative, let alone speculative.
The IRS apparently issued its demand for payment in May 2016.
Will this disagreement be settled any time soon?
As they say, time will tell.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: WealthAdvisor (September 18, 2017) “IRS Squeezing Whitney Houston’s Estate for $11 Million In Back Taxes”