Everyone loves taxes, right? Tax season is one of the times that Americans dread the most, and for good reason too. The amount of documents you need to pull up, along with bringing tax statements from your brokerage, creates a headache for many. It’s gotten easier now with applications like Intuit TurboTax where you can connect everything in a streamlined way, but the process is still very complicated, and you never want to be late on your taxes.
But what if you could avoid taxes altogether? Or at least majorly reduce your taxes? Well, many Bitcoin millionaires have done just that by moving to Puerto Rico, an unincorporated territory of the United States, located in the northeast Caribbean Sea. Puerto Rico’s tax benefits for crypto are multifold, first and foremost residents don’t have to pay any taxes on capital gains. This comes as a major benefit to investors in the U.S who must pay as much as 37% on short-term capital gains and up to 20% on long-term gains, which applies to crypto as well.
You may be wondering… how and why would Puerto Rico remove capital gains tax? Well, it’s because Act 60, known as the Individual Investors Act. This Act lowers that tax obligation down to zero if certain qualifications are met. The requirements appear to be that one must have physical presence in the Island for at least 183 days of the year and must not have been a resident of Puerto Rico from 2009 to 2019. Most entrepreneurs and crypto traders living in Puerto Rico meet this requirement. What do you think about Puerto Rico’s interesting tax laws? And would you make the move?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.