{"id":160,"date":"2024-11-07T19:54:19","date_gmt":"2024-11-07T19:54:19","guid":{"rendered":"https:\/\/www.bourbonnaistax.com\/blog\/?p=160"},"modified":"2024-11-07T19:54:20","modified_gmt":"2024-11-07T19:54:20","slug":"good-news-bad-news","status":"publish","type":"post","link":"https:\/\/www.bourbonnaistax.com\/blog\/good-news-bad-news\/","title":{"rendered":"Good News Bad News"},"content":{"rendered":"
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Americans love<\/em> lists. Maybe it\u2019s because we\u2019ve gotten lazy in our old age. Maybe it\u2019s because social media has destroyed our attention spans. Regardless of why, open any magazine or news site, and you\u2019ll find one or more lists filling space. Sometimes, they\u2019re informative and fun. Mostly, though, they\u2019re clickbait sludge. (Odds are good it was ChatGPT that did the \u201cwriting,\u201d too.)<\/p>\n\n\n\n

Forbes<\/em>\u00a0magazine launched their flagship list of the 400 richest Americans back in 1982. Since then, they\u2019ve added so many lists they have an entire\u00a0web page<\/a>\u00a0dedicated just to helping you find them: billionaires, of course, along with best-paid athletes, richest self-made women, hip-hop cash kings, and the Cannabis 42.0. But their most fun list might be the annual\u00a0Highest-Paid Dead Celebrities<\/a>. For 2024, Michael Jackson took home the gold with $600 million. Freddy Mercury (lol) took home the silver with $250 million. Dr. Seuss snagged the bronze with $75 million, proving healthcare reform is still no match for your kindly family doctor.\u00a0\u00a0And Matthew Perry joined the list at #9, powered by $17 million in\u00a0Friends<\/em>\u00a0royalties.<\/p>\n\n\n\n

Of course, none of those celebrities are actually enjoying those millions. So what really happens to them? And who winds up paying the tax?<\/p>\n\n\n\n

If celebrities do their homework before shuffling off this mortal coil, their estate plan governs where their income-producing assets go. Those assets may include song royalties, film or TV residuals, and the like. They may pass outright to a spouse or may be held in trust for children or other heirs. In most cases, the income eventually gets passed to another taxpayer, who simply reports that income on their own return and pays tax on it.<\/p>\n\n\n\n

Stars who earn enough to make the Highest-Paid Dead Celebrities list face another hurdle, however. Most of them wind up owing millions in estate tax (or at least their heirs do). That can mean years of expensive court battles debating asset values. When Michael Jackson\u2019s executors filed his estate tax return, they valued his image and likeness rights at just $2,105. The IRS politely laughed and came back at $434,264,000. Twelve years after his death, the Tax Court released a 271-page opinion settling the matter at $4,153,912. That meant over $170 million in tax savings.<\/p>\n\n\n\n

But celebrities don\u2019t always do their homework. And recent history is full of cases where they die without wills, and assets get tied up in court battles. Prince\u2014currently #6 on the Dead Celebrities list at $35 million\u2014died without a will. So did Aretha Franklin. So did Black Panther<\/em> star Chadwick Boseman. When that happens, income generally accumulates in an estate account while survivors fight it out for the spoils. Executors file Form 1041 to report the estate\u2019s income and deductions, then pay tax on anything not distributed. (By the way, accountants love<\/em> filing Form 1041. Just because clients die doesn\u2019t mean we can\u2019t still bill them.)<\/p>\n\n\n\n

Dying without a will is a great<\/em> way for a celebrity to waste money on unnecessary taxes. It also means their assets can wind up with someone they never would have chosen. When Doors frontman Jim Morrison died at age 27, his estate passed to his wife, Pamela Courson. Just a few weeks after a court finalized her inheritance, she OD\u2019d, with no will\u2014and Morrison\u2019s estate passed to her<\/em> parents. Morrison\u2019s mom and dad had to spend six years fighting in court for 50% of the Lizard King\u2019s royalties. Unintended consequences! Get some!<\/p>\n\n\n\n

You all know the lesson here, besides \u201cdon\u2019t do ketamine in your hot tub.\u201d It\u2019s \u201cdo your homework!\u201d Many tax and financial disasters can be prevented with a little bit of planning and paperwork. We\u2019re here to help with the plan.<\/p>\n\n\n\n

Today, your average accountant or tax professional focuses their effort on making sure the debits match the credits. It\u2019s scary how much they can leave on the table! That\u2019s why we don\u2019t stop with telling you how much you owe. We take the time to look for those tax “disconnects” to make your income disappear like your kids\u2019 candy. There’s nothing scary about it at all. So call us when you’re ready to pay less. You’ll think the savings are pretty sweet!<\/p>\n","protected":false},"excerpt":{"rendered":"

Dying without a will is a great way for a celebrity to waste money on unnecessary taxes. It also means their assets can wind up with someone they never would have chosen. When Doors frontman Jim Morrison died at age 27, his estate passed to his wife, Pamela Courson. Just a few weeks after a court finalized her inheritance, she OD\u2019d, with no will\u2014and Morrison\u2019s estate passed to her parents. Morrison\u2019s mom and dad had to spend six years fighting in court for 50% of the Lizard King\u2019s royalties.<\/p>\n","protected":false},"author":2,"featured_media":161,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[3],"tags":[4,10,11,9,68,29],"class_list":{"0":"post-160","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-taxes","8":"tag-tax","9":"tag-tax-reduction","10":"tag-tax-savings","11":"tag-tax-strategy","12":"tag-taxrelief","13":"tag-wealth-tax","14":"entry"},"_links":{"self":[{"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/posts\/160","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/comments?post=160"}],"version-history":[{"count":1,"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/posts\/160\/revisions"}],"predecessor-version":[{"id":162,"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/posts\/160\/revisions\/162"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/media\/161"}],"wp:attachment":[{"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/media?parent=160"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/categories?post=160"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/tags?post=160"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}