For a long time Neverland Ranch related topics have been creating a lot of interest and discussion among the fans. With the recent news of Neverland is up for sale for $100 Million, I wanted to do an overview of what we learned over time.

In 2008 first came the Neverland foreclosure news, followed by the news of MJ- Colony Capital Neverland deal. At that time it was widely reported that this was a joint venture between MJ and Colony Capital – meaning both MJ and Colony Capital were part owners ( AP Link, TMZ Link).

After MJ’s death, we were able to see MJ Estate’s accounting filed in probate court. All three accounting documents to date listed that Estate has 87.5% undivided interest in Neverland.


 So to recap, we knew MJ (and later MJ Estate) was in a joint venture with Colony Capital, they were co-owners and had 87.5% interest in Neverland.

Based on the available information, especially due to joint venture and 87.5% interest, fans assumed this meant MJ (and later MJ Estate) had equal decision power as Colony Capital.

In July 2014, MJ Estate sent out a statement to fans alerting them Colony Capital would be selling Neverland soon. In this statement Estate referred to Colony Capital as “property manager” and stated Colony has the “right to sell Neverland” under the MJ-Colony Capital Neverland deal. This created heated discussions as it went against the common belief about Neverland situation. At that time we still did not know the specifics of MJ – Colony Capital Neverland deal.


When I wrote “Opinion: MJ Estate vs. IRS basics and catalog valuations ”, I expected it to be a hot topic and create discussions. However I did not expect it to result in personal attacks and insults. Call me naive but I expect grown adults to be able to handle difference of opinions with respect and maturity.
 Today in addition to the cursing and personal attacks, I received valid questions (coming from people with strong opposing views but able to express themselves respectfully) and I realized there’s at least one confusion due to the fact that I was trying to keep the original article as short and as simple as possible. I decided to start by doing a clarification and then answer some valid questions I received today.
Beatles Expert Bruce Spizer issue
In the original article I wrote : “TMZ posted a valuation from Beatles expert / tax attorney Bruce Spizer who said “the catalog definitely worth at least $300 Million and could be as much as $400 Million”. TMZ and some fans failed to realize that this valuation actually would confirm Estate’s valuations. If the catalog is definitely worth at least $300 Million (market value/gross value) and if you deduct $300 Million in liabilities the shown on return / net value/ tax value would be $0.”
As you can see from the above quote I fully acknowledged Bruce Spizer’s credentials as a Beatles Expert and a tax attorney. Before I go on, let’s do a reminder about TMZ articles.


 If people operated on "if IRS said so they must be right", there would not be the concept of "tax dispute" and a "tax court". It's apparent that when IRS says "you owe me, give me more money", people do not just say "okay take my money", they fight it at court. 

and let me give you an example

Valuation victory for taxpayer – irs loses most of its proposed estate and gift tax deficiencies

Estate of Mitchell v. Comm'r., T.C. Memo 2011-94 (4/28/2011) 

This Tax Court Memo illustrates the benefits of good estate planning and valuations. The net result in this case was that the IRS lost most of its proposed $10 million estate and gift tax deficiencies.

James Mitchell, a widower, died a resident of California leaving substantial assets to his teenage sons in trust. This case involves disputes between the estate and the IRS on the valuation of two real property holdings and two paintings. The real property consisted of a beachfront residence and a ranch, both of which the decedent leased to third parties on a long term basis. The use of the relatively long-term leases for both properties was a method to insure keeping the properties in the family and having them be income producing. The paintings were by well known American western artists.


The dispute between MJ Estate and IRS isn't new and there haven’t been any new developments but after seeing some confusion about valuations and seeing how it still comes up during conversations, I decided to do a two part opinion series about this topic.

In this first part I would cover the basics about Estate tax, valuation, market and tax value of the catalogs. In the second part I will mention valuation of image and likeliness and the possible outcomes. So let’s get started!

What is Estate tax? The estate tax is a tax on property (cash, real estate, stock, or other assets) transferred from deceased persons to their heirs. It's paid only once. It requires an accounting of the property of the deceased at the date of the death. The values of the property – also known as gross Estate- are determined and then deductions –such as liabilities and debt - are taken out to determine the net value. Tax is determined based on this net value.

Two very important points to remember from the above definition is that:

1.Value of the Estate is determined at the date of death

2.Tax value (net value) = Market value (gross value) – deductions


4. What are my chances of winning on appeal? 

Most appeals are not successful. For example, the California courts of appeal will reverse the judgment in civil appeals only about 20 percentof the time. An appellant in a civil case therefore has a one-in-five chance of winning, in general. 

Appeals are not a second bite at the apple. This is not your opportunity to re-litigate the case. The issues on appeal are normally limited to the issues that were raised in the trial court; you cannot point to any new evidence; and the appellate courts will analyze the legal issues from a different standpoint, often giving deference to the trial judge’s rulings or the jury’s findings. Therefore, it is always a good idea to have an attorney review the record and evaluate the issues on appeal, as early as possible, to determine your chances of prevailing on appeal. 

Appeals can also take a long time to resolve. The latest statistics from the Judicial Council 2007 Court Statistics Report show that the median time for a civil appeal in the California appellate courts takes 431 days, from the filing of the notice of appeal to the filing of an opinion. 

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