In 2020, the US Internal Revenue Service (IRS) had also provided an estimate of $163.2million. Now, according to The Minneapolis Star-Tribune, the six-year legal battle over the pop superstar’s assets has come to an end, with both organisations reaching a final agreement on its worth.
Prince – who died in 2016 from a fentanyl overdose, leaving no will – had six sibling heirs, two of whom, Alfred Jackson and John R. Nelson, have since died. Two others are currently in their eighties. Since the passing of the ‘Purple Rain’ star, millions of dollars have been paid to administer his estate and provide a plan for its distribution.
The heirs have reportedly accepted the final figure.
In Carver County District Court last Friday (January 14), where the value of the settlement was disclosed in a filing at probate court, L. Londell McMillan, attorney for three of Prince’s siblings, said: “It’s been a long six years.”
The estate will be divided as early as February, evenly distributed between New York music company Primary Wave and the three oldest of Prince’s heirs and their families.
Taxes on the estate are expected to run into the tens of millions. Just over $5million of Prince’s estate will be exempt from tax under US federal law, however, after that the rate is 40 per cent. In the state of Minnesota, the first $3million is tax-exempt, with the remaining amount then taxed at 16 per cent.
The “accuracy-related penalty” the IRS had imposed on the estate has been dropped as part of the agreement, as has the same penalty issued by The Minnesota Department of Revenue, according to the filing.
Comerica sued the IRS in US Tax Court, claiming the IRS’ calculations were “full of errors”. The tax trial set for March has been cancelled because of the settlement.
Comerica said that while the IRS’ settlement was “fair and reasonable”, they believe they would have “prevailed” in the tax court case, instructing Prince’s heirs to continue pressing the IRS and, if required, to go to trial if they believe lowering of estate taxes would be in their “primary interest”.
The filing said: “Instead, the members of the heir group have uniformly communicated to [Comerica] their strong desire that the estate settles with the taxing authorities.”