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The Guardian being confusing about numbers. Again

Michael Jackson had accumulated more than half a billion dollars of debt when he died in 2009, new court documents reveal.

OK. Which leaves the impression that he was broke.

The IRS has argued that the estate “undervalued its assets” and owed about $700m more in taxes and penalties.

Estates are taxed upon net values. So, if there was tax due from the estate then the assets must – must – have been worth more than the debts. He wasn’t broke that is.

No, changes in the value of the estate after his death do not count – for the value at the moment of death is the value of the estate.

3 thoughts on “The Guardian being confusing about numbers. Again”

  1. Well, if people loaned him half a billion dollars they clearly thought he was good for it.

  2. Didn’t the Queen Mother die with lots of debt, but more assets, because selling the assets would have triggered a capital gains tax charge, so it was cheaper to borrow?

    Then on death the debts can be deducted from the assets, for inheritance tax, and the assets can be sold without CGT.

    Plus with Michael Jackson a lot of the assets were presumably IP rights, which can be sold but it’s not easy and it attracts a lot of possibly unwanted publicity.

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