The IRS and the administrator of Prince’s estate have finally ended a six-year battle concerning the value of the late music icon’s estate.
Both parties have agreed that Prince’s estate is valued at $156.4 million. Prince’s heirs accepted the final valuation, decided by Comerica Bank & Trust and the IRS. While Comerica originally valued the estate at $82.3 million, the IRS claimed it was worth $163.2 million. After failing to leave a will before his passing in 2016, Prince had six sibling heirs. Two of Prince’s brothers, Alfred Jackson and John R. Nelson, passed away during the six-year planning of Prince’s estate. L. Londell McMillan, an attorney for three of Prince’s siblings, called the case a “long six years” when speaking at a Carver County District Court hearing Friday. Prince’s estate will be divided nearly evenly between music company Primary Wave, who purchased nearly half of the estate from three of the sibling heirs, and three of Prince’s oldest siblings. As part of the agreement, the IRS dropped its $6.4 million “accuracy-related penalty” and the Minnesota Department of Revenue has dropped its accuracy penalty.
According to a report:
“Tax collectors will take a bite out of Prince’s fortune that will run into the tens of millions of dollars. A bit more than $5 million of Prince’s estate will be exempted from taxes under federal law, but thereafter the tax rate is 40%. In Minnesota, the first $3 million is tax-exempt; after that, much of Prince’s estate will likely be taxed at 16%.”