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Member
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Last Login: 10/13/2008 8:28:56 AM
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| Deceased recieved royalties for work as director on Broadway shows. He does not own the copyright to the show, only has a right to percentage of royalites recieved for performance of the show. Now after death his wife will be receiving the royalty income. Is this reflected on the 706 (Sch G?) I suppose I can do a present value of future earnings. How do I reflect the money coming in to the wife after death? I had a discussion with a colleage that it depends on whether it is owned or unowned copyrights. And that while both owned and unowned are reflected in full on the 706, only the owned are amortized (income is not picked up until fully amortized). It does not seem right to me that if the unowned copyright future income is on the 706, it would still be taxable and not IRD. Thank you for any help. Harlan Levinson, CPA
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Member
Group: Forum Members
Last Login: 11/17/2008 3:44:26 PM
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giving this my "best guess" since no one else is replying...
a right to income is an asset- and yes, it is valued based on the present value of the future stream of income. since this is a first death, valuation issues would impact primarily trust funding (assuming that there will be trusts created upon the first death). if this is a trust asset then it would be reported along with other trust assets. if not, then it would be a misc. asset. the money that the wife gets is income to her and assuming no tax upon the husband's death, there would be no i.r.d. deduction (because there is no estate tax).
hlcpa (8/21/2008)
Deceased recieved royalties for work as director on Broadway shows. He does not own the copyright to the show, only has a right to percentage of royalites recieved for performance of the show. Now after death his wife will be receiving the royalty income.
Is this reflected on the 706 (Sch G?) I suppose I can do a present value of future earnings. How do I reflect the money coming in to the wife after death?
I had a discussion with a colleage that it depends on whether it is owned or unowned copyrights. And that while both owned and unowned are reflected in full on the 706, only the owned are amortized (income is not picked up until fully amortized). It does not seem right to me that if the unowned copyright future income is on the 706, it would still be taxable and not IRD. Thank you for any help. Harlan Levinson, CPA
IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any matters addressed herein. |
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