Michael Jackson's Death & Estate Taxes

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As attention turns from Michael Jackson's death to the complex estate he left behind, experts are sorting through his holdings and putting price tags on their value with an eye on the tax bill they will generate. (June 10)

The estate tax is the worst kind of tax ever.

America bankrupt:

102 trillion for SS & medicare
25 trillion for TARP & bailouts
53 trillion plundered from other trusts

Every single American man, woman & child owes over $600K in FED Gov debt

The US dollar will collapse within the next 1 to 2 years

Creditors and heirs of Michael Jackson hoping for a cut of his musical empire will have to line up with the Internal Revenue Service, which could lay claim to $80 million or more in federal estate taxes.

To settle his tax bill, the executors of his estate may have to sell or borrow against lucrative but hard-to-value assets or ask the IRS for a multi-year extension. That could allow the estate to pay the tab over time with earnings from Jackson's share in rights to songs by the Beatles and his own music — prized properties whose value will likely make the estate's tax bill only bigger.

"The government is not going to take a Beatles record as payment. They want to be paid in cash," said Roy Kozupsky, a veteran estate lawyer in New York who has worked on behalf of several wealthy clients.

Given the convoluted nature of Jackson's finances, coming up with the cash won't be easy. Technically, the tax bill is due nine months after the date of death. In special cases, estates can spread out the payments for a period of up to 14 years. Once paid, the tax bill could dramatically shrink the inheritance passed on to the pop star's heirs — his 79-year-old mother and three children.

"It's going to mean less money going to the beneficiaries," said Lawrence Heller, a partner in the tax and estate practice of the law firm Bryan Cave in Santa Monica, Calif. "They're the ones that are going to suffer."

The estate's tax dilemma highlights the cost and complexity of dying wealthy in America. Ironically, had Jackson died six months later, his estate may have had to pay no estate tax at all.