{"id":5970,"date":"2021-10-13T15:26:46","date_gmt":"2021-10-13T15:26:46","guid":{"rendered":"https:\/\/intelekbusinessvaluations.com\/en-au\/?p=5970"},"modified":"2022-12-27T20:16:39","modified_gmt":"2022-12-27T20:16:39","slug":"michael-jacksons-estate-court-case","status":"publish","type":"post","link":"https:\/\/intelekbusinessvaluations.com\/en-au\/business-valuations\/michael-jacksons-estate-court-case\/","title":{"rendered":"Michael Jackson\u00b4s Estate Court Case"},"content":{"rendered":"<p>After Michael Jackson\u2019s death in 2009, his likeness and image were under trial to determine their value and the tax impact it would have on Jackson\u2019s heirs. After years of trial disputes, the judge decided that the IRS valuation was heavily overpriced due to misappreciations, and instead sided closer to the estate\u2019s expert valuation at $4.125 million vs. a $161 million valuation from the IRS. Here is a summary of what happened:<\/p>\n<ul>\n<li>Initially, the IRS valued Jackson\u2019s image at $434 million vs. the valuation of the estate expert at $2.1 (a massive difference), both based heavily on weighting an\u00a0<a href=\"https:\/\/intelekbusinessvaluations.com\/en-au\/business-valuations\/income-approach\/\"><strong>income approach<\/strong><\/a>. However, the valuation from the estate expert considered the hits on Jackson\u2019s image and that little to no income was generated from it in the years leading up to him passing away.<\/li>\n<\/ul>\n<ul>\n<li>The IRS heavily weighted \u201cforeseeable opportunities\u201d, which included future expected income from events such as themed attractions, branded merchandise, and income from a <em>Cirque du Soleil<\/em> show. It\u2019s necessary to consider that Michael Jackson was the highest-paid celebrity, either dead or alive, in 2013 due to a <em>Cirque du Soleil <\/em>show inspired by his life.<\/li>\n<\/ul>\n<ul>\n<li>The tax liability that would have resulted from the initial IRS valuation of Jackson\u2019s entire estate could have meant $700 million to his heirs. This amount included $200 million in fines.<\/li>\n<\/ul>\n<ul>\n<li>However, the judge appointed the foreseeable opportunities from the IRS valuation of Jackson\u2019s image as \u201cunreliable and unpersuasive\u201d, as the <em>Cirque du Soleil<\/em> show was in 2013 and the valuation date was 2009, among other factors.<\/li>\n<\/ul>\n<ul>\n<li>At the time of the trial\u2019s commencement, the IRS and estate experts re-evaluated Jackson\u2019s image as being worth $163 million and $3 million, respectively. The valuation included a\u00a0<a href=\"https:\/\/intelekbusinessvaluations.com\/en-au\/business-valuations\/market-approach\/\"><strong>market approach<\/strong><\/a>\u00a0based on posthumous earnings from other celebrities, such as Marilyn Monroe, Princess Diana, and Elvis Presley from the estate\u2019s valuation expert.<\/li>\n<\/ul>\n<ul>\n<li>The IRS considered earnings from celebrities such as Tony Hawk, Paris Hilton, Regis Philbin, Jennifer Lopez, and Tyra Banks (based on different reports). During the trial, the IRS had a mishappening with one of its expert witnesses for alleged perjury.<\/li>\n<\/ul>\n<ul>\n<li>Finally, based on a ruling that ran 271 pages long, the appointed judge\u2019s valuation of Jackson\u2019s image concluded at $4.125 million, which meant a valuation from the IRS in excess of $150 million.<\/li>\n<\/ul>\n<p>Business valuation can be more of an art than a science, in which different considerations can heavily impact a conclusion of value, as we can see in the case of Jackson\u2019s image. Institutional experts can make mistakes or assumptions that lead to hefty tax liabilities. For this reason, finding the appropriate, trusted appraiser is critical, as is the need for a second opinion.<\/p>\n<p>What are your thoughts on this big win from Jackson\u2019s estate expert and for his heirs?<\/p>\n<figure id=\"attachment_7400\" aria-describedby=\"caption-attachment-7400\" style=\"width: 700px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-7400 size-full\" src=\"https:\/\/intelekbusinessvaluations.com\/en-au\/wp-content\/uploads\/2021\/10\/9.jpg\" alt=\"Michael Jackson\u00b4s Estate Court Case Australia\" width=\"700\" height=\"400\" srcset=\"https:\/\/intelekbusinessvaluations.com\/en-au\/wp-content\/uploads\/2021\/10\/9.jpg 700w, https:\/\/intelekbusinessvaluations.com\/en-au\/wp-content\/uploads\/2021\/10\/9-300x171.jpg 300w\" sizes=\"(max-width: 700px) 100vw, 700px\" \/><figcaption id=\"caption-attachment-7400\" class=\"wp-caption-text\">Michael Jackson\u00b4s Estate Court Case Australia<\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>After Michael Jackson\u2019s death in 2009, his likeness and image were under trial to determine their value and the tax impact it would have on Jackson\u2019s heirs. After years of trial disputes, the judge decided that the IRS valuation was heavily overpriced due to misappreciations, and instead sided closer to the estate\u2019s expert valuation at [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":5975,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v17.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Michael Jackson\u00b4s Estate Court Case - Intelek Business Valuations Australia<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/intelekbusinessvaluations.com\/en-au\/business-valuations\/michael-jacksons-estate-court-case\/\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"InteleK Australia\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebSite\",\"@id\":\"https:\/\/intelekbusinessvaluations.com\/en-au\/#website\",\"url\":\"https:\/\/intelekbusinessvaluations.com\/en-au\/\",\"name\":\"Intelek Business Valuations Australia\",\"description\":\"Valuations and Advisory Australia\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/intelekbusinessvaluations.com\/en-au\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/intelekbusinessvaluations.com\/en-au\/business-valuations\/michael-jacksons-estate-court-case\/#primaryimage\",\"inLanguage\":\"en-US\",\"url\":\"https:\/\/intelekbusinessvaluations.com\/en-au\/wp-content\/uploads\/2021\/10\/michael-jackson-estate-court-case.jpg\",\"contentUrl\":\"https:\/\/intelekbusinessvaluations.com\/en-au\/wp-content\/uploads\/2021\/10\/michael-jackson-estate-court-case.jpg\",\"width\":1296,\"height\":810},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/intelekbusinessvaluations.com\/en-au\/business-valuations\/michael-jacksons-estate-court-case\/#webpage\",\"url\":\"https:\/\/intelekbusinessvaluations.com\/en-au\/business-valuations\/michael-jacksons-estate-court-case\/\",\"name\":\"Michael Jackson\\u00b4s Estate Court Case - 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