Paisley Park opens its doors for public tours starting next week. Readers in Minneapolis and western Wisconsin who happen to be fans of Prince probably already know this. What is also common knowledge is that managers of Prince’s estate are making this move because it’s estimated he may owe as much as $150 million in estate taxes.
Had Prince created a plan that included a will, the estate might have avoided some problems and saved some significant hassles with the Internal Revenue Service. But because he did not, his heirs are relying on his huge body of fans to help alleviate the tax liability. They are not alone.
The tax burden for rap artist Nelly is not nearly as heavy as Prince’s. Still, at $2.4 million, it is no small matter. The problem is that in today’s age of digital music sales and distribution, there are some real questions whether Nelly’s fans can generate the amount of revenue he needs to settle his debt.
According to SPIN magazine, and a report by Fortune.com, Nelly fans will have to stream nearly 290 million of his recordings to clear his tax bill. That’s presuming he has royalty terms that pay him at the highest end of the spectrum. If Nelly is at the low end, experts estimate he’ll need more than 400 million streams to hit the mark. At this point, streams Nelly’s work are up 200 percent, but will it be enough?
Facing a tax liability is never pleasant, but by consulting experienced legal counsel, it can become easier to find the most viable path to resolution.