Description: Michael Rashmir Est. 1988
The Tax Benefits of Moving to Puerto Rico
The IRS launched a campaign against taxpayers who claim income tax benefits through Puerto Rico Act 22 (i.e., the Act to Promote the Relocation of Individual Investors to Puerto Rico), without meeting the requirements of IRC Section 937, Residence and Source Rules Involving United States Possessions.
Puerto Rico is a “territory” of the U.S. that was acquired from Spain in 1898 in a treaty that ended the Spanish-American War. It is not a “State.” As a result, Puerto Rico residents at times have benefits that do not flow to other U.S. residents, and at other times burdens that other U.S. residents do not have to endure. One benefit of becoming a new Puerto Rican resident is its tax regime as the U.S. generally treats Puerto Rico as a foreign country for tax purposes. If you are a bona fide resident of Pue