Mark Kohler warns that moving to Puerto Rico for crypto tax breaks requires genuine full-time residency, not tourism. The IRS often taxes crypto trading as business income, not capital gains, making the advertised 4% rate misleading. Several of his clients moved, struggled with daily life, and left within a year.
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Do I have any tax obligations if I'm trading crypto from Puerto Rico? It's not that simple. Because if you've left assets in the US Just to go to Puerto Rico to live for a year, to sell them tax free, the system is not built for that. It's operational business income. It's a very tricky strategy. It's not going to be as simple as you think. And I would say generally, no, you're not going to get The Puerto Rico 4% rate on what you're thinking about. I'm going to tell you, be skeptical, but really start unpacking it and peeling away the onion. I will say this, everybody, and this is not a diss on people in Puerto Rico. I've been to Puerto Rico multiple times and have a great time when I I go, but to use the Puerto Rico tax strategy, you have to live there, really live there every day. I've helped clients do the strategy and they love the Puerto Rican people, but they move there and they're like, I don't think I like living here. And they're back in a year. And it's not the people. You're living in a different country. When you visit a country and vacation is very different than living there. Just keep that in mind.
