When Bob Dylan recently sold his publishing catalog for an estimated $300+ million, or when Stevie Nicks sold hers for a reported $100 million, some fans might have thought it strange that Prince’s entire estate, including all his rights to music compositions and recordings, totaled only $82.3 million in value. So did the I.R.S.
The Internal Revenue Service has asked Prince’s estate for an additional $32.4 million above what it’s already paid in taxes, plus a $6.4 million “accuracy penalty.” According to the I.R.S., the true value of the estate is $163.2 million, almost twice what estate administrator Comerica filed for. The story, first reported on Saturday by the Star Tribune, is now gaining national traction with New York Times and Associated Press coverage.
It was never going to be easy to administer the estate of Prince: a superstar with wide-ranging holdings from music to real estate to (the I.R.S. did not fail to note) a forklift. When he died without a will in 2016, his estate was subject to a substantial tax that, it seems, just got even more substantial. The present dispute threatens to extend the period Comerica has to administer the estate before it’s ultimately turned over to Prince’s surviving siblings, who as next of kin are heirs to the fortune.
While the I.R.S. contends Comerica undervalued assets including real estate like Prince’s sprawling property on Galpin Boulevard in Chanhassen, the heart of the dispute is the question of just how much Prince’s music is worth. There’s simply no cut-and-dried way to objectively value music holdings, since the amount of income they might generate depends on a wide range of factors including changing popular taste, the artist’s reputation, and the savvy of whoever’s cutting deals for various uses of the music.
Already, outside investors are angling to take the rights off the heirs’ hands, complicating the question of exactly what the music’s worth. It may be hard to imagine selling the rights to “Purple Rain,” but if Bob Dylan can let “Like a Rolling Stone” go, anything is possible…especially once the I.R.S. gets involved.