Many people in Puerto Rico still believe that inheriting comes with a tax. For deaths since January 1, 2018, there is no inheritance or gift tax in Puerto Rico (Law 76-2017; Internal Revenue Code, Section 2021.01(d)). What remains is an information return, Form SC 2800 C, which is due 12 months after the death and is filed in SURI (the online system of the Departamento de Hacienda, Puerto Rico's Treasury, known as "Hacienda"). We explain it in the estate information return.
What you inherit isn't income, but what it produces is. The value of property received by inheritance is excluded from gross income. On the other hand, rent, interest or dividends generated by that property are taxable (Section 1031.01(b)(2)).
That's why, after a death, there can be up to three kinds of income tax returns: the deceased's final return, the return of the sucesión (the estate, meaning the group of heirs, which Hacienda treats as a separate taxpayer) and, in some cases, federal returns.
The deceased's final return (Form 482)
Who files it. The estate's administrator or representative files the individual income tax return, Form 482, with the income the deceased received up to the date of death, and signs it (Instructions for the 2025 Individual Income Tax Return). Hacienda states that this form is filed electronically.
When it's due. For tax years since 2023, it's due on the normal date for the year of death. If the person died in 2025, the return was due April 15, 2026, with an automatic extension to October 15 if requested.
If the deceased was married. Since Law 52-2022, if a spouse dies during the year, both are treated as married for the whole year, unless the surviving spouse remarries that same year. If they lived together, they can file a single return with the deceased's income up to the date of death and the surviving spouse's income through December 31. On the return, you check the box for "Fallecido Durante el Año" (Deceased During the Year) and enter the date of death. Keep a copy of the death certificate.
What's earned after the death doesn't go on this return, but on the estate's.
The estate's return (Form 480.8)
When it must be filed. Every estate whose gross income exceeds $1,300 in the tax year must file Form 480.8, "Planilla de Contribución sobre Ingresos de Fiduciarios (Sucesiones y Fideicomisos)" (Fiduciary Income Tax Return for Estates and Trusts), called Form 480.80 in English (Section 1061.09; 2025 Form 480.8 instructions). On the return, the estate claims a $1,300 credit.
What counts as estate income. Rent from an inherited property, interest and dividends on accounts, profits from a business that kept operating and gains from selling property, among others.
Dates. It's due April 15 if the estate uses a calendar year, or on the 15th day of the fourth month after the close of its year. There is an automatic 6-month extension with Form SC 2644, requested electronically in SURI, but the extension doesn't extend the deadline to pay.
How it's filed. The 2025 instructions say Form 480.8 is filed on paper, in person or by mail, and that payments are made only through SURI. Hacienda has been moving returns to SURI, so confirm the current method before filing.
Who pays. The fiduciary, meaning the person who manages the estate, pays the tax.
Don Tomás's children rented out his apartment in Carolina for $750 a month starting in June, seven months of the year. The estate's gross income was $5,250, more than the $1,300 that triggers the requirement, so they must file Form 480.8. Because gross income reached $5,000 or more, if there is a will they must include a copy with the return.
To close the books faster. The fiduciary can ask Hacienda for a prompt assessment of the deceased's or the estate's taxes. Hacienda then has 18 months from the request, but no more than 4 years from when the return was filed (Section 6010.05(b)).
The employer identification number (EIN)
Form 480.8 and the request for an extension of the estate information return (SC 2777) ask for the estate's employer identification number. This is the federal EIN, which the IRS issues free online; the IRS states that it's needed to administer certain estates. Get it on the IRS's official website, irs.gov, and be wary of websites that charge to do it.
Federal returns
Puerto Rico residents. Bona fide residents of Puerto Rico exclude Puerto Rico–source income from their federal return. If the deceased had a federal filing obligation, for example because of U.S. income or a federal salary, their final Form 1040 is filed as if they were alive, and Form 1310 is used to claim a refund.
The estate in the federal system. An estate with more than $600 in annual gross income files Form 1041. We have not confirmed how that rule applies to an estate whose income is all from Puerto Rico; ask an accountant.
Federal estate tax. This needs to be checked when there are U.S. stocks or property there. We explain it in estates with property in the U.S..
Tax basis: the key for when you sell
The tax basis is, in simple terms, what the law considers an asset cost. The gain on a sale is the price minus that basis. In general, for a house it's the original cost plus permanent improvements, minus depreciation if it was rented out.
| Puerto Rico | Federal | |
|---|---|---|
| Rule for inherited property | Deaths since 2018: the heir keeps the basis the deceased had (carryover basis) | Market value on the date of death (stepped-up basis) |
| Source | CRI, Section 1034.02(a)(5)(D) | IRC § 1014 |
| Who it matters to | Anyone who sells and pays tax in Puerto Rico | Anyone who files a federal return, such as an heir living in the United States |
For deaths between 2011 and 2017, Puerto Rico's rule was different: generally, market value at death or a basis increased by the estate exemption (Section 1034.02(a)(5)(C)). Law 76-2017 deliberately eliminated that automatic increase for later deaths.
Keep the paperwork. With carryover basis, the deceased's purchase deed and improvement receipts are worth money. Look for them now, before they get lost.
Selling the inherited house
An important exemption since 2025. The Incentives Code says that, for tax years beginning after December 31, 2024, the gain on the sale of the seller's principal residence in Puerto Rico is exempt from income tax and from the alternative basic tax (Law 60-2019, Section 6060.05(c)). For an inherited property, it counts as a principal residence if:
- the deceased lived there continuously for their last 2 years before death; and
- it has not been rented, short-term or long-term, at any time after the death.
In addition, the seller can't be a beneficiary of the incentives under Law 22-2012 or Section 2022.02 of the Incentives Code. According to Hacienda's instructions, this gain is reported on Schedule D Individual, Part II, Column F.
Doña Carmen, a widow, bought her house in Toa Baja in 1998 for $85,000 and added a room for $15,000, so her basis was $100,000. She died in 2024 while living there, when the house was worth $260,000. In 2026 her three children sell it for $260,000, without having rented it out.
Using Puerto Rico's carryover basis, the gain is $260,000 − $100,000 = $160,000, about $53,333.33 per child. But because Doña Carmen lived in the house for her last two years and it wasn't rented, that gain may be exempt in Puerto Rico.
Marta, one of the daughters, lives in Orlando and pays taxes to the IRS. For her federal return, her basis is one third of the value at death, $86,666.67, and her share of the price is also $86,666.67, so her federal gain is $0 before selling costs.
If the house doesn't qualify for the exemption, for example because it was rented after the death, the gain calculated with carryover basis is taxable in Puerto Rico. An heir who lives in the United States may have to report it in both systems; the rules for avoiding double taxation call for an accountant.
Remember the earlier steps. To sell, you need Hacienda's relevo (lien release, formally the Certificación de Cancelación de Gravamen) and the property recorded in the heirs' names. See selling an inherited house and Hacienda's lien release (relevo).
Frequently asked questions
Do I have to pay tax on what I inherited?
In Puerto Rico, no, if the death occurred in 2018 or later. The value of what you inherit is not income. The income the inherited property produces, and the gain if you sell it, are taxable unless an exemption applies.
Does an estate that had no income have to file Form 480.8?
The requirement arises when the estate's gross income exceeds $1,300 in the year. An empty house that isn't rented out doesn't, on its own, produce income. If you have doubts about a particular year, consult an accountant.
Who signs the estate's returns?
The estate's fiduciary or administrator. For the estate information return, Hacienda recognizes as administrator a forced heir, the surviving spouse, the albacea (executor) or contador partidor (estate divider) named in the will, or a court-appointed administrator. See the executor (albacea).
Who pays the tax if we sell before dividing the estate?
It depends on how the sale is structured and whether the gain is exempt. Before signing, review your case with an accountant and with the notario (in Puerto Rico a notary is an attorney). If you haven't yet agreed on how to divide things, read dividing the estate (partition).
Sources
- Código de Rentas Internas de Puerto Rico de 2011, Secciones 1031.01(b)(2), 1034.02(a)(5), 1061.09, 2021.01(d), 2051.01(e) y 6010.05(b) (OGP, Rev. 28 may. 2026). bvirtualogp.pr.gov
- Departamento de Hacienda, Folleto de Instrucciones de la Planilla de Individuos 2025 (Rev. 27 feb. 2026). hacienda.pr.gov
- Departamento de Hacienda, Planilla de Individuos 2025, Formulario 482. hacienda.pr.gov
- Departamento de Hacienda, Formulario 480.8 de 2025 e instrucciones. hacienda.pr.gov
- Código de Incentivos de Puerto Rico (Ley 60-2019), Sección 6060.05(c) (OGP, Rev. 16 jul. 2026). bvirtualogp.pr.gov
- IRS, "Get an employer identification number". irs.gov
- 26 U.S. Code § 1014. law.cornell.edu
- IRS, "Deceased taxpayers: Filing the estate income tax return, Form 1041". irs.gov
CaudalRelicto.com is an independent guide. It is not Puerto Rico's Departamento de Hacienda, the courts or any government agency. This page is general information, not legal advice from an attorney who knows your case. Names and figures in examples are hypothetical. Found an error? Tell us.
