Author Topic: Puerto Rico residency  (Read 4282 times)

yorkville

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Puerto Rico residency
« on: February 22, 2015, 03:05:12 AM »
Have seen some articles about people moving to Puerto Rico due to tax reason. Capital gains accrued after becoming a resident are not taxable. Capital gains accrued before becoming a resident is taxable at nominal federal rate for 10 year, but non taxable after 10 years. I believe this includes capital gain from real estate properties held anywhere. And Puerto Rican sourced dividend and interests are not taxed.

Any thoughts?
« Last Edit: February 22, 2015, 03:07:15 AM by yorkville »

SaintM

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Re: Puerto Rico residency
« Reply #1 on: February 22, 2015, 07:26:47 AM »
Puerto Rico has teetered on the edge of bankruptcy for years.  I would be cautious before investing much in PR-sourced bonds.

yorkville

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Re: Puerto Rico residency
« Reply #2 on: February 22, 2015, 07:43:19 AM »
I dont mean buying PR bonds. The main benefit of taking up residency seems to be the elimination of capital gain tax.

Rezdent

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Re: Puerto Rico residency
« Reply #3 on: February 22, 2015, 07:59:58 AM »
Commenting to follow.  I visited Puerto Rico once and loved it.
I noticed that many everday items were quite expensive because practically everything is imported.  They do produce a fair amount of agricultural products and have some exports such as coffee and rum.

I was told that jobs are difficult to find and many people move for opportunities elsewhere.

Secretly Saving

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Re: Puerto Rico residency
« Reply #4 on: February 22, 2015, 08:53:37 AM »
Like Puerto Rico, there are other places that have commonwealth status with the US -- American Samoa, Guam, US Virgin Islands, and my favorite Northern Mariana Islands (NMI has the lowest tax liabilities in the United States -- up to 90% tax rebate!)  Living in one of these places has many financial benefits (but also costs -- travel to and from and also higher costs since more is imported).  We have traveled to and talked to a lot of people who have retired in these various locations.   

Alectejas

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Re: Puerto Rico residency
« Reply #5 on: February 22, 2015, 12:19:28 PM »
If you reside in PR (meaning live there for more than half the year) then you pay no federal income tax on income earned in PR.  This is a great deal for finance type people.
http://www.bloomberg.com/bw/articles/2014-06-26/puerto-rico-tax-haven-for-americas-super-rich

GatorNation

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Re: Puerto Rico residency
« Reply #6 on: February 24, 2015, 06:00:09 AM »
As a Puerto Rican who lived in the island for many years, my advise is to not move to PR.  It's true that you don't pay federal income tax, but you will pay sales tax (about to be raised to 16%), property taxes, state income taxes... Which all can ends up costing you more than just staying in the states.

Crime is also rampant and the islands is suffering through a major economic crisis.  More people are moving out of the island than ever before, to the point were the population has been decreasing over the past ten years.

I could list another 100 reasons why not to move there, but I think that I've covered the major points.

seattlecyclone

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Re: Puerto Rico residency
« Reply #7 on: February 24, 2015, 08:03:57 AM »
On the other hand, the island is beautiful, sales tax doesn't matter much if you don't buy much, and a poor local economy is a lot less of a detriment when you don't need to work anymore.

Sid Hoffman

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Re: Puerto Rico residency
« Reply #8 on: February 24, 2015, 02:40:17 PM »
IMO crime is the #1 reason why I would choose to live or not live somewhere.  I value freedom highly, and any place where there's high crime, there is effectively a high oppression against freedom.  How much less free can you be than to have your possessions destroyed, stolen, or your very life taken from you?  It's a bummer that they're having such trouble there, but I'd rather live somewhere safe and pay 50% taxes than not live at all or be in fear and terror at all times.