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How To Value Prince's Estate Income from Royalties

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Probably a lot, but I'd think it's very hard to estimate.
 
Lee in L.A. said:
I'd think it's very hard to estimate.
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They can only value the future value of the income stream. But who knows what that is worth? It is sure to decline with time, and the time-value of money suggests at current interest rates (the average cost of capital) of a competing investment would be low. And money deep into the future, well...it ain't much money today. What investment is worth paying a lot today with anticipating an income 20 or 30 years down the road?
 
The IRS entering this is not uncommon, The IRS/treasury has benefits that other lienholders would not have and at a reported 56%+/- overall tax rate there is alot at stake. They can come in after the fact and force review. There is alot of complexity in valuing Intellectual Property (IP).

When it comes to taxation, I have had IRS matters on a commercial property that have taken years to iron out, even when the valuation was correct. It is just how the system works. This is one reason that appraisers/valuers shouldn't do IRS work unless they are ready to work the file for the 7 years or so term afterward of IRS review.

There is an entire area in the valuation of intellectual property. There are firms and people who specialized in valuing license rights, some of it is based on systems adapted from real property rights and accounting. Similarly, with valuing business/goodwill or a commercial appraiser fine-tuning ARGUS model works, there are lots of nuances. I am sure you could get an IP expert to give you a 1+hour summary and still not understand it all.

I coached kids rec soccer with one person who does licensing rights negotiation and valuation frequently for the biggest entertainment corporation and I have the opportunity to know several IP attorneys; anytime you get substantial IP involved you are talking millions of dollars to argue about. It's complicated.
 
Russ Kitzberger said:
appraisers/valuers shouldn't do IRS work
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Agree for large estates. The IRS is loathe to deal with small estates or giftings. They have to be really bored that day. Conservation easements and other dodgy efforts would be more likely to pique their interest.
 
Terrel L. Shields said:
They can only value the future value of the income stream. But who knows what that is worth? It is sure to decline with time, and the time-value of money suggests at current interest rates (the average cost of capital) of a competing investment would be low. And money deep into the future, well...it ain't much money today. What investment is worth paying a lot today with anticipating an income 20 or 30 years down the road?
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Oh I bet there are people who specialize in that type of thing. I a sure there is some algorithm somewhere that tries to calculate the future popularity and income stream of estate. I don't know for sure if it will decline over time. But really don't know. Fame is a fickle thing.
 
I should have saved that meme with a long list of classic rock albums that are 50 yo this year.
Some things are enduring. Predicting them seems a bit of a crap shoot. Or dart toss.
 
The lesson here is the KGB will come after you even when your dead and buried. Get a will done no matter your age.

never meant to cause you any sorrow
I never meant to cause you any pain
I only wanted one time to see you laughing
I only want to see you laughing in the purple rain

Purple rain, purple rain
Purple rain, purple rain
Purple rain, purple rain
 
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