Puerto Rico and 0% Capital gains

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Puerto Rico and 0% Capital gains

A client reached out with the question and I felt its worth sharing with the audience – We anticipate significant capital gains in 2025, both long and short term. If we move to Puerto Rico next week, would we qualify for 0% capital gains for our 2025 taxes

If you move to Puerto Rico next week and meet the requirements to become a bona fide resident of Puerto Rico, you may qualify for a 0% tax rate on capital gains for your 2025 taxes, but this depends on several factors.

If you meet all these requirements, you can exclude from U.S. federal income tax any capital gains that accrue after you become a bona fide resident of Puerto Rico. However, any gains that accrued before you became a resident will still be subject to U.S. federal income tax. Therefore, for capital gains realized in 2025, only the portion of the gains that accrue after you establish bona fide residency in Puerto Rico will be eligible for the 0% tax rate.

Author of this article Jack Chaudhary specializes in Individual, Corporate Tax returns, Foreign Taxes, Expats, Non-resident Taxes, Payroll, Crypto and e-Commerce. With the Enrolled Agent credential, Jack represents taxpayers before the IRS and state taxing authorities. He zealously advocates for his clients to ensure the best results are achieved. Book an appointment here with him for a consultation call.

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