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Originally Posted by John F
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Interesting, thanks. This is the part of interest to this discussion:
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The value of the copyrights a deceased author owns will be included in the author’s taxable estate.
The fair market value of copyrights is based upon their income producing potential, discounted to present worth. A general rule of thumb used by estate tax experts for computing fair market value of a copyright is to calculate the average annual earnings of the copyright over a 5 year period then multiply that annual amount by a number usually falling between 3 and 7.
For example, if a copyright earned an average of $100,000 in each year during the 5 years prior to the author’s death, the fair market value of that copyright for estate tax purposes would range between $300,000 and $700,000 depending on factors such as the length of the remaining copyright term, the prior uses to which the copyright was put, and the likelihood that income from those uses would either increase or decrease in the future.
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However, it also notes that, in US law, the first $5m of an estate is free from inheritance tax, meaning that very, very few people pay it. In the UK, by comparison, the amount is £325,000, meaning that many people who own a house will be liable to it, given rises in house prices in recent decades.