Puerto Rico- Capital Gain tax zero?

Question

Read a BP article on Puerto Rico.  Said there is a special investor program.  You don’t pay any capital gain taxes.  Since PR is a ???? protectorate of the U.S. you don’t have to pay reciprocating taxes back in the U.S.

Clarify.   We invest in Belize which has no capital gains tax.   But we would still have to pay the capital gain taxes even if made overseas in Belize.

Does anyone know if I sale an asset in the U.S., but have residency in PR do I still need to pay the taxes in the U.S.?  Thanks.

Sam Yin · Answer

After reading Act 60 more thoroughly, you do indeed get some immediate benefits if you become a resident in Puerto Rico. Mainly, capital gains tax at 15%. But you have to be there 10 years consistently after obtaining the proper residency and approved permits AND meet the annual donation requirements, THEN it will be reduced to 5%.

However, after reviewing this again,I feel all the other details associated with Act 60 is not really worth my while. But it may work for some. You just need to look deeper into it. Valuations prior to establishing residency is tax at different rate. Thus moving there and selling that year or the next is not very beneficial overall.

my 0.02

Henry Clark · Answer

Thanks going to check it out.  Dont mind no electric for little or no capital gains.  Have some big numbers I would avoid even if we have to live 180 days in Puerto Rico.

Will need to check it out.  My neighbor is Puerto Rican and one of our customers is military and Puerto Rican.  Both said they would never move back there.

Sam Yin · Answer

@Henry Clark this is true... BUT I think you have to live (have residency) there 10 years to get thar full benefits.

I could be wrong... But that's what I last found out in my research. Then again, I'm married, with several kids, so I tbeen known to be wrong several times in the past.

Aaron T. · Answer

ACT 60 makes you a slave to the government and the island. IF you dont want to be their bitch, then ACT 60 may not be for you. Plus they are making it more expensive to participate. For a majority of people this would not work.

A lot of people think they can buy rentals and claim ACT 60 only to find out that rental income is earned income. I suggest anyone wanting to invest in the island pay for a couple different lawyers time as a consult.

Aaron T. · Answer

Bingo. Every islander only comes back to visit family. There is a reason they don't come back, because life is hard and day-to-day life is a struggle in some aspects.

Puerto Rico- Capital Gain tax zero?

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