Are Tax Moves to Puerto Rico Worth It for Crypto Holders?
Robert W. Wood's original article for cointelegraph.com reduced by 51%
The interaction between the IRS and the taxman in Puerto Rico is nuanced, requiring some Puerto Ricans to file with the IRS, some with the Puerto Rico Department of Finance, and some with both. Still, Puerto Rico hopes to lure American mainlanders with an income tax of only 4%.Legally avoiding the 37% federal rate and an additional 13.3% in California sounds pretty good. What's more, there is no tax on dividends, and no capital gains tax in Puerto Rico.
Move, then sell?First - and this seems to be the most common question tax-weary people ask about Puerto Rico - forget about easily avoiding U.S. tax on the appreciation in your assets before you move. You might be a bona fide resident of Puerto Rico by the time you sell, but you still have to pay U.S.
tax on all the pre-move appreciation in your assets. Only your post-move appreciation will be subject to the special tax rules in Puerto Rico. Your tax home - i.e., your real home - must be in Puerto Rico.
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