Act 60 Capital Loss Carryforward Explained

Under Act 60, if you have capital losses, you can use them to offset your capital gains. This is called a capital loss carryforward. In Puerto Rico, you can carry forward these losses for up to seven years. However, you can't use your losses to wipe out all of your gains. There's a rule that limits the use of capital losses to 90% of your capital gains for the year. This means you'll still have to pay tax on 10% of your gains, even if you have enough losses to cover them all. Our tool can help you calculate how this rule affects you.

Act 60 doesn't replace Puerto Rico's entire tax system. It works with it. This is important when it comes to capital losses. The type of loss you have and where it came from matters. For example, a loss from selling stocks is treated differently than a loss from selling real estate. Our tool is designed to help you sort through these rules and see how they apply to your specific situation. We make it easy to understand the interaction between Act 60 and the regular Puerto Rico tax rules, so you can be confident in your tax filings.

Tax-loss harvesting is a simple way to lower your tax bill. It just means selling investments that have lost value to offset gains from your winning investments. If you're an Act 60 beneficiary, this can be a smart move. But you need to be careful about the wash-sale rule. This rule says you can't claim a loss if you buy the same or a very similar investment within 30 days. Our tool can help you keep track of your trades and avoid this common mistake. We provide clear, actionable tips to help you make the most of tax-loss harvesting.