Estates of Act 60 Decree Holders in Puerto Rico

In recent years thousands of people have moved to Puerto Rico from the states. Many did so with a resident investor decree under the Incentives Code (Act 60-2019), which replaced the former Act 22-2012. Others came for work, for family or to retire. When one of these people dies, or when they plan their estate, they run into a system that combines Puerto Rico rules and federal rules that do not always point in the same direction.

This guide does not analyze the tax benefits of a decree, which involve other topics. It focuses on what happens with the estate.

A few terms: the causante is the person who died; the caudal relicto (the decedent's estate) is the whole of their property and debts; the legítima (forced share) is the part of the estate the law reserves for certain relatives.

Puerto Rico: no tax, but a return

There is no estate tax. For residents or nonresidents who died after December 31, 2017, Puerto Rico does not charge estate tax (Código de Rentas Internas, Section 2021.01(d), as amended by Act 76-2017). There is also no tax on gifts made after that date (Section 2041.01(c)).

But there is an information return. The estate administrator must file in SURI (the online system of the Departamento de Hacienda, Puerto Rico's Treasury) the estate information return, Modelo SC 2800 C, within 12 months of the death (Section 2051.01(e)). It does not ask for market values, but it does ask for a description of each asset and the decedent's tax basis. With the return you request the relevo, the certificate that cancels Hacienda's lien on the property; without it you cannot sell or record a property from the estate. See the estate information return.

Lifetime gifts. Even though there is no tax, the donor must file a gift information return (Modelo SC 2788 B) when gifts to one person in a year exceed $10,000. It is due January 31 of the following year (Section 2051.02(e)). See lifetime gifts.

The federal estate tax does apply

Why Section 2209 does not apply to you. Section 2209 treats as a "nonresident not a citizen" a citizen who lived in Puerto Rico and who acquired citizenship solely through their connection to Puerto Rico, for example by being born here. The Form 706 instructions clarify that someone who became a citizen entirely independently of Puerto Rico, such as someone born in a state, is a citizen for federal estate tax purposes and files Form 706.

What this means in practice:

• Your federal estate includes all of your property, including what you own in Puerto Rico.
• The federal exclusion is $15,000,000 for deaths in 2026. It was $13,990,000 in 2025 and $13,610,000 in 2024.
• Form 706 is required if the gross estate, plus certain prior gifts, exceeds the exclusion. It is also filed so the spouse can keep the unused exclusion, which is known as portability.
• The federal annual gift exclusion is $19,000 per recipient in 2025 and 2026.

Moving to Puerto Rico does not eliminate the federal estate tax for a citizen born in a state. Neither does a Puerto Rico decree.

If the person is not a U.S. citizen, the federal rules are different. Consult a specialized advisor.

Tax basis: two different rules

Tax basis is the cost the law recognizes for calculating the gain when an asset is sold.

In Puerto Rico, carryover basis. For property inherited from a person who died after December 31, 2017, the heir's basis is the same as the decedent's, with no adjustment to market value (Section 1034.02(a)(5)(D)). Act 76-2017 deliberately eliminated the automatic step-up in basis.

Under federal law, adjusted basis. Inherited property takes as its basis the fair market value on the date of death (26 U.S.C. § 1014).

Which of the two rules matters more depends on where the heirs reside and how that sale is treated in each system. For example, bona fide residents of Puerto Rico exclude Puerto Rico source income from federal tax (26 U.S.C. § 933). This is one of the main reasons to plan with an accountant who knows both systems. See taxes of the estate.

Puerto Rico civil law: the forced share

This surprises many people who come from a state where you can leave everything to whomever you want.

If you are domiciled in Puerto Rico, your estate is governed by Puerto Rico law (Art. 62 of the Civil Code). If you have children or a spouse, half of your estate is the forced share, and you can only leave the other half freely (Art. 1623). See forced heirship: the legítima.

Real estate on the island is always protected. Even if you keep your domicile in another state, the forced share rules apply to any real estate you own in Puerto Rico (Art. 62).

Your will from another state. A will is valid as to form if it complies with Puerto Rico law, the law of the place where it was signed or the law of the testator's domicile (Art. 65). But a joint will of two people in a single document has no effect on real estate in Puerto Rico (Art. 1640). And even if the form is valid, the content must respect the forced share.

Your spouse. The spouse's rights are governed by the law that regulates the effects of the marriage, as long as they do not impair the forced share (Art. 63).

Planning: what to review

1. Your domicile. It affects which civil law governs your estate. Keep your documentation consistent.
2. Your will. Review with a Puerto Rico notario (in Puerto Rico a notary is an attorney) whether your will or your documents from another state respect the forced share. See how to make a will.
3. Your trusts. If you have a trust created in a state, ask how it interacts with Puerto Rico's forced share. See trusts in Puerto Rico.
4. The basis of your property. Keep purchase deeds and brokerage statements. The SC 2800 C return asks for the decedent's basis in each asset.
5. The federal tax. Compare your worldwide estate against the exclusion and think about portability for your spouse.
6. Property in other states. It may require probate there. See estates with property in the U.S..

For a general guide, see estate planning basics.

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.