Moving to Puerto Rico for Act 60 Tax Benefits

Puerto Rico's Act 60 offers 4% corporate tax and zero capital gains, but the 183-day residency requirement and IRS audits catch 40% of claimants who fail to sever mainland ties. This strategy costs an average of $15,000 in legal fees and relocation expenses, yet 3 out of 4 applicants abandon benefits within two years. Compared to Buying Depreciating Assets for Deductions's depreciating asset play, Act 60 at least preserves capital — except when the IRS reclassifies residency, triggering back taxes plus 20% penalties.