reglab/statecodes huggingface dataset:
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter D - Special Partnerships and Partners (§§ 30551 — 30578) › § 30559 - Nonrecognition of gain or loss on contributions of property to a special partnership

(a) General rule. — No gain or loss shall be recognized to a special partnership or to any of its partners in the case of a contribution of money or other property to the special partnership, in exchange for an interest in the special partnership, except as provided in subsections (b) and (c).
(b) Flexibly depreciated property. — Except as provided in § 30581(c) of this title, in the case of a contribution of flexibly depreciated property, no gain or loss shall be recognized to a special partnership or to any of its partners unless opted otherwise. The option to recognize gain or loss with respect to such contribution shall be irrevocable.
(c) Property subject to liability or lien. — In the case of a contribution of property subject to a liability or lien, which is assumed by the special partnership, gain shall be recognized to the contributing partner to the extent in which the part of the liability or lien from which he/she is discharged exceeds the adjusted basis for the contributing partner on the contributed property.
History —Jan. 31, 2011, No. 1, § 1114.09, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter D - Special Partnerships and Partners (§§ 30551 — 30578) › § 30560 - Character of gain or loss on contributed unrealized receivables, inventory items, and capital loss property to a partnership

(a) Contribution of unrealized receivables. — In the case of any property which:
(1) Was contributed to the special partnership by any partner, and
(2) was an unrealized receivable in the hands of such partner immediately before such contribution, any gain or loss recognized by the partnership on the disposition of such property during the five (5)-year period beginning on the date of such contribution shall be treated as ordinary income or loss, as the case may be.
(b) Contribution of inventory items. — In the case of any property which:
(1) Was contributed to the special partnership by any partner, and
(2) was an inventory item in the hands of such partner immediately before such contribution, any gain or loss recognized by the partnership on the disposition of such property during the five (5)-year period beginning on the date of such contribution shall be treated as ordinary income or loss, as the case may be.
(c) Contribution of capital loss property. — In the case of any property which:
(1) Was contributed by any partner to the special partnership, and
(2) was a capital asset in the hands of such partner immediately before such contribution, any loss recognized by the partnership on the disposition of such property during the five (5)-year period beginning on the date of such contribution shall be treated as a loss from the sale or exchange of a capital asset to the extent that, immediately before such contribution, the adjusted basis of such property in the hands of the partner exceeded the fair market value of such property.
(d) Definitions. — For purposes of this section:
(1) Unrealized receivables. — The term “unrealized receivables” shall have the same meaning given to such term by § 30570(c) of this title.
(2) Inventory items. — The term “inventory items” shall have the same meaning given to such term by § 30570(d) of this title.
(3) Substituted basis property. — If any property described in subsection (a), (b) or (c) is disposed of in a nonrecognition transaction, the tax treatment which applies to such property under such subsections shall also apply to any substituted basis property resulting from such transaction. A similar rule shall apply in the case of a series of nonrecognition transactions.
History —Jan. 31, 2011, No. 1, § 1114.10, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter D - Special Partnerships and Partners (§§ 30551 — 30578) › § 30561 - Continuation of special partnerships

(a) General rule. — An existing special partnership shall be considered as continuing if it is not terminated. A special partnership shall be considered as terminated only if:
(1) The revocation of the election to operate as a special partnership is requested, or the election is revoked on the Secretary’s own motion, as provided in § 30581(b) of this title.
(2) Any of the requirements stated in § 30551 of this title are not met.
(3) The partners agree to terminate the existing special partnership for a valid business reason. The termination shall be effective from the date of notice thereof.
(b) In the case of a merger or consolidation of two (2) or more special partnerships, the resulting special partnership shall be considered the continuation of any merging or consolidating special partnerships whose partners own an interest of more than fifty percent (50%) in the capital and the profits of the resulting special partnership.
History —Jan. 31, 2011, No. 1, § 1114.11, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter D - Special Partnerships and Partners (§§ 30551 — 30578) › § 30562 - Election

(a) Option.— The statement of a partnership where it elects the provisions of this subchapter shall be filed with the Secretary within ninety (90) days following the beginning of the first taxable year for which the election shall apply. Said election shall be made by sworn statement undersigned by the partners or such partner to whom the administration of the special partnership has been delegated.
(b) Irrevocability of election.— Such election shall be irrevocable, except that the Secretary may revoke it by petition of the special partnership or on his/her own motion for the year in which the requirements of this subchapter are not met, or for any taxable year in which it is determined that the special partnership has been used to evade the payment of taxes. The Secretary may revoke such election whenever the special partnership fails to comply with its tax liabilities, including, without limitation, those related with taxes imposed and those liabilities involving its acting as employer or withholding agent.
(c) Effect of election.— A partnership making an election under § 30581 of this title shall be subject to the provisions of subsections (d), (e), (f), and (g) of § 30583 of this title and § 30588 of this title.
(d) No election shall be allowed for a partnership to seek coverage under this subchapter for any taxable year beginning after December 31, 2010.
History —Jan. 31, 2011, No. 1, § 1114.12, retroactive to Jan. 1, 2011; Dec. 10, 2011, No. 232, § 120.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter D - Special Partnerships and Partners (§§ 30551 — 30578) › § 30564 - Income and credits

(a) In computing his/her taxable income and income tax for any taxable year, each partner shall include as income or loss his/her distributive share of the special partnership’s income or loss as provided in § 30556 of this title. The deduction for the partner’s share of the partnership’s net loss shall be subject to and governed by the provisions and limitations of § 30122(e) of this title and the regulations prescribed thereunder.
(b) Credit. — The partner may claim as credit against his/her tax liability his/her share of any credit provided in subsections (a) and (f) of § 6013 of Title 23, the credits under Sections 14 and 16 of the Capital Investments Fund Act, and the tax imposed under § 10042(a) of this title, or any other successor law of a similar nature. A partner’s share in the credits described in this subsection shall be determined and reported by the partnership in accordance with § 30556(a) of this title.
History —Jan. 31, 2011, No. 1, § 1114.14, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter D - Special Partnerships and Partners (§§ 30551 — 30578) › § 30565 - Determination of partner’s distributive share

(a) General rule. — A partner’s distributive share of income or loss of the special partnership, or of any tax credit of the special partnership shall be determined by the partnership agreement, except under the circumstances described in subsection (b) of this section.
(b) Exceptions. — The distributive share of a partner of the special partnership’s income or loss, or of any tax credit of the special partnership shall be determined in accordance with the partner’s interest if, when all facts and circumstances are taken into account:
(1) The partnership agreement does not provide as to the partner’s share of special partnership’s income, loss or tax credit, or
(2) The allocation to a specific partner of share in the gains, losses of the special partnership or in the tax credits of the partnership does not respond to economic realities. It shall be understood that the allocations contained under the agreements of partnerships operating under the Tourism Incentives Act of 1983, §§ 693 et seq. of Title 23, and the Tourist Development Act of 1993, §§ 6001 et seq. of Title 23 or any successor law of a similar nature, respond to economic realities.
(c) Family partnership. —
(1) Distributive share of donee includible in gross income. — In the case of any special partnership interest created by gift, the distributive share of the donee under the partnership agreement shall be includible in his/her gross income, except to the extent that such share is determined without allowance of reasonable compensation for services rendered to the partnership by the donor, and except to the extent that the portion of such share attributable to donated capital is proportionately greater than the share of the donor attributable to the donor’s capital.
(2) Purchase of interest by member of family. — For purposes of this section, an interest purchased by one member of a family from another member shall be considered to be created by gift from the seller, and the fair market value of the purchased interest shall be considered to be donated capital.
(3) For purposes of this subsection, the family of any individual shall include only his/her spouse, ancestors, and lineal descendants, and any trusts for the primary benefit of such persons.
History —Jan. 31, 2011, No. 1, § 1114.15, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter D - Special Partnerships and Partners (§§ 30551 — 30578) › § 30566 - Treatment of a nonresident partner’s distributive share

The share in the income of a special partnership, prorated to its partners that are nonresident aliens or corporations or nonresident foreign partnerships shall be considered as a distribution made at the end of the taxable year of the special partnership, and the same shall be ruled by the provisions of §§ 30278, 30280, 30281, 30431 and 30441 of this title. However, the amount of the withheld tax under said provisions shall be remitted to the Department not later than the fifteenth (15th) day of the third month following the close of the taxable year of the special partnership, or than the fifteenth (15th) day of the fourth month following said close, when an extension has been granted, according to the provisions of § 30246(c)(3) of this title.
History —Jan. 31, 2011, No. 1, § 1114.16, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter D - Special Partnerships and Partners (§§ 30551 — 30578) › § 30568 - Basis of interest of partner who receives a distribution

In the case of a distribution by the special partnership to a partner other than the total liquidation of his/her interest, the adjusted basis for said partner of his/her interest in the partnership shall be reduced, but not below zero, by:
(1) The amount of any money distributed to such partner, and
(2) the amount of the basis for said partner of distributed property, other than money, determined as provided in § 30577 of this title.
History —Jan. 31, 2011, No. 1, § 1114.18, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter D - Special Partnerships and Partners (§§ 30551 — 30578) › § 30569 - Recognition of profit or loss in distributions made by special partnerships

In case of a distribution of interests by the special partnership or a distribution in total or partial liquidation of the interest of a partner in said special partnership:
(1) Gain shall only be recognized to such partner to the extent that the money received exceeds the adjusted basis of his/her interest in said special partnership immediately before the distribution, and
(2) losses shall only be recognized to such partner in the case of a distribution in total liquidation of a partner’s interest if the distributed property is part of the property described in clauses (A) or (B) below. The amount of the loss shall be the excess of the adjusted basis of the partner’s interest in the special partnership over the sum of:
(A) Any money distributed, and
(B) the partner’s basis determined as provided in § 30577 of this title, of any unrealized receivables or inventory (as defined in § 30570 of this title).
Any gain recognized under this subsection shall be treated as realized in the sale or exchange of a capital asset. Any loss recognized under this subsection shall be an ordinary loss.
(3) Special rule. — This section shall not apply to distributions made to a retiring partner or a deceased partner successor in interest. In these cases, the provisions of § 30575 of this title shall apply.
History —Jan. 31, 2011, No. 1, § 1114.19, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter D - Special Partnerships and Partners (§§ 30551 — 30578) › § 30570 - Character of gain or loss on disposition of distributed property

(a) Sale or exchange of certain distributed property. — The gain or loss on the disposition by a partner of unrealized receivables or inventory items, as they are defined in this part, which are distributed by a special partnership shall be considered as ordinary. This subsection shall not apply to the sale or exchange of inventory items carried out after five (5) years from the date of distribution.
(b) Holding period for distributed property. — In determining the period for which a partner has held distributed property, other than for purposes of subsection (a), the provisions of § 30141(i) of this title shall apply.
(c) Unrealized receivables. — For purposes of this subchapter, the term “unrealized receivables” includes, to the extent that these are not previously includible in income of the special partnership, any right to payment for:
(1) Goods delivered, or to be delivered, to the extent that the proceeds therefrom would be treated as ordinary income, or
(2) services rendered, or to be rendered.
(d) Inventory items. — For purposes of this subchapter, the term “inventory items” shall mean:
(1) Property of the special partnership of the type described in § 30141(a)(1)(A) of this title;
(2) any other property of the special partnership which, if sold or exchanged by the partnership, would not be considered as a capital asset or property of the type described in § 30141(i) of this title, and
(3) any other property held by the partnership which, if held by the partner, would be considered property of the type described in clause (1) or (2) above.
History —Jan. 31, 2011, No. 1, § 1114.20, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter D - Special Partnerships and Partners (§§ 30551 — 30578) › § 30571 - Sale or exchange of interest in a special partnership

Gain or loss from the sale or exchange of a partner’s interest in a special partnership, shall be treated as realized from the sale or exchange of a capital asset.
History —Jan. 31, 2011, No. 1, § 1114.21, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter D - Special Partnerships and Partners (§§ 30551 — 30578) › § 30572 - Treatment of certain liabilities

(a) Increase in the partner’s liabilities. — The assumption by a partner of partnership liabilities shall be treated as a contribution of money by such partner to the special partnership.
When a partner assumes partnership liabilities, the basis of his/her interest in the special partnership shall be increased by the amount of the liability assumed.
(b) Decrease in partner’s liabilities. — The assumption by the special partnership of a partner’s individual liabilities shall be treated as a distribution of money to the partner.
History —Jan. 31, 2011, No. 1, § 1114.22, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter D - Special Partnerships and Partners (§§ 30551 — 30578) › § 30573 - Payments to a deceased partner’s successor in interest

The amounts includible under § 30564 of this title in the gross income of a successor in interest of a deceased partner shall be treated as income with respect to a decedent as provided in § 30113 of this title.
History —Jan. 31, 2011, No. 1, § 1114.23, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter D - Special Partnerships and Partners (§§ 30551 — 30578) › § 30575 - Payments to a retiring partner or a deceased partner’s successor in interest

(a) General rule. — Payments made to a retiring partner or the successors of a deceased partner shall be considered:
(1) As a distributive share to the recipient of special partnership income, if the amount thereof is determined with regard to the special partnership’s income, or
(2) as a secured payment, if the amount is determined without regard to the special partnership’s income.
(b) The Secretary shall determine by regulations the circumstances in which such payments shall be treated as a distribution by the special partnership in exchange for the interest of such partner and not as a distributive share or secured payments under subsection (a).
History —Jan. 31, 2011, No. 1, § 1114.25, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter D - Special Partnerships and Partners (§§ 30551 — 30578) › § 30576 - Basis of property contributed to special partnership

The basis of the property contributed to a special partnership by a partner shall be the adjusted basis of such property to the partner at the time of the contribution, increased by the gain recognized to the contributing partner (under § 30559 of this title) in the case of property subject to an obligation or lien. In the case that the contributed property has been flexibly depreciated, the basis of such property to the special partnership shall be equal to the flexibly adjusted basis (as defined in § 30181(d)(2) of this title) of the contributed property, increased by the gain or decreased by the loss recognized to the contributing partner. In the case of contributed property which has been subject to accelerated depreciation, the basis of such property to the special partnership shall be equal to the basis of the contributed property, decreased by the depreciation claimed under the accelerated depreciation method, increased by the gain, or decreased by the loss recognized to the contributing partner.
History —Jan. 31, 2011, No. 1, § 1114.26, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter D - Special Partnerships and Partners (§§ 30551 — 30578) › § 30577 - Basis of distributed property other than money

(a) General rule. — The basis of property, other than money, distributed by a special partnership to a partner other than in liquidation of the partner’s interest in the special partnership, shall be the adjusted basis of the property to the special partnership immediately before such distribution.
The partner’s basis of the property thus distributed shall not exceed the adjusted basis of the partner’s interest in the special partnership, decreased by any amount of money distributed in the same transaction.
(b) Distribution in liquidation. — The basis of property, other than money, distributed by a special partnership to a partner in liquidation of the partner’s interest in the special partnership shall be an amount equal to the adjusted basis of the partner’s interest in the special partnership, reduced by any money distributed in the same transaction.
History —Jan. 31, 2011, No. 1, § 1114.27, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter D - Special Partnerships and Partners (§§ 30551 — 30578) › § 30578 - Credit for contribution to special partnership described in § 30551(a)(10) of this title

(a) A credit is allowed to the partner of a special partnership described in § 30551(a)(10) of this title, equal to twenty-five percent (25%) of the amount of his/her annual contribution to the special partnership, made before the effective date of the provisions of any law of the Government of Puerto Rico that grants tax credit to the film industry, but said credit shall not exceed two hundred fifty thousand dollars ($250,000) in the taxable year in which the contribution is made. When determining the amount of the annual contribution of the partner to the special partnership, only the cash amounts contributed shall be considered. The credit shall be applied against the determined tax under the provisions of this part after taking into account any net loss of the partner in the special partnership. Such credit shall neither be applied against the alternative minimum tax, nor against the alternate basic tax applicable to individuals.
(b) Credit carryover. — In the event that the credit described in subsection (a) of this section exceeds the amount of the tax determined for a taxable year, such excess may be carried over to each of the next five (5) succeeding taxable years in chronological order, and claimed as a credit up to the limit of tax determined in each year, until the credit is exhausted, but never in excess of two hundred fifty thousand dollars ($250,000) for any taxable year.
History —Jan. 31, 2011, No. 1, § 1114.28, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter E - Corporations of Individuals (§§ 30581 — 30590) › § 30585 - Adjustments to basis of stock of the stockholders

(a) General rule. —
(1) Increases in basis. — The basis of each shareholder’s stock in a corporation of individuals shall be increased for any period by the pro rata share of the shareholder in the items of income described in § 30584(a)(1) of this title.
(2) Decreases in basis. — The basis of each shareholder’s stock in a corporation of individuals shall be decreased for any period (but not below zero) by the sum of the following items determined with respect to the shareholder for such period:
(A) Distributions by the corporation which were not includible in the income of the shareholder by reason of § 30586 of this title,
(B) the allowed items of loss and deduction described in § 30584(a)(1) of this title,
(C) the credits § 6013(a) of Title 23, Section 14 of the Investment Capital Funds Act, and the credit of § 30578 of this title, as well as any other similar credit, and
(D) the withholding at the source of §§ 30275 and 30280 of this title.
(E) any expense of the corporation of individuals not deductible in computing its taxable income and not properly chargeable to capital account.
(b) Special rules. —
(1) Income items. — An amount which is required to be included in the gross income of a shareholder and shown on his/her return shall be taken into account under subsection (a)(1) only to the extent such amount is included in the shareholder’s gross income on his/her return, increased or decreased by any adjustment of such amount in a redetermination of the shareholder’s tax liability.
(2) Adjustments in basis of indebtedness. —
(A) Reduction of basis. — If for any taxable year the amounts specified in paragraphs (B) and (E) of subsection (a)(2) exceed the amount which reduces the shareholder’s basis to zero, such excess shall be applied to reduce (but not below zero) the shareholder’s basis in any indebtedness of the corporation of individuals to the shareholder.
(B) Restoration of basis. — If for any taxable year beginning after June 30, 1995, there is a reduction under paragraph (A) in the shareholder’s basis in the indebtedness of a corporation of individuals to a shareholder, any net increase (after the application of clauses (1) and (2) of subsection (a)) for any subsequent taxable year shall be applied to restore such reduction in basis before any of it may be used to increase the shareholder’s basis in the stock of the corporation of individuals.
(3) Coordination with §§ 30125(c)(2) and § 30126 of this title. — This section and § 30584 of this title shall be applied before the application of §§ 30125 and 30126 of this title to any taxable year of the shareholder or the corporation in which the security or debt becomes worthless.
History —Jan. 31, 2011, No. 1, § 1115.05, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter E - Corporations of Individuals (§§ 30581 — 30590) › § 30590 - Taxable year of a corporation of individuals

(a) General rule. — For purposes of this subchapter, the taxable year of a corporation of individuals shall be a year allowed.
(b) Year allowed defined. — For purposes of this section, the term “year allowed” means that the taxable year is:
(1) A year that ends on December 31, or
(2) any other accounting period for which the corporation establishes a business purpose to the satisfaction of the Secretary. For purposes of clause (2), any postponement of income to the shareholders shall not be treated as a business purpose.
History —Jan. 31, 2011, No. 1, § 1115.10, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter F - Entities With Exemption Decree Under Special Laws (§§ 30601 — 30615) › § 30601 - Industrial incentives

Entities covered under §§ 10641 et seq. of this title, better known as the “Economic Incentives Act for the Development of Puerto Rico”, as amended, or any other previous or subsequent similar law.
History —Jan. 31, 2011, No. 1, § 1116.01, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter F - Entities With Exemption Decree Under Special Laws (§§ 30601 — 30615) › § 30602 - Hospital units

Entities covered under §§ 371 et seq. of this title, better known as the “Hospital Facilities Tax Exemption Act”, as amended.
History —Jan. 31, 2011, No. 1, § 1116.02, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter F - Entities With Exemption Decree Under Special Laws (§§ 30601 — 30615) › § 30603 - Tourist incentives administered by the Tourism Company

Entities covered under §§ 6341 et seq. of Title 23, better known as the “Puerto Rico Tourist Development Act of 2010”, or any other previous or subsequent similar law.
History —Jan. 31, 2011, No. 1, § 1116.03, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter F - Entities With Exemption Decree Under Special Laws (§§ 30601 — 30615) › § 30604 - Exemption on income from rents in historic zones

Entities covered under Act No. 7 of March 4, 1955, which provides for the tax exemption payment on account of real, restored, improved, or rebuilt property on the historic zone of San Juan, as amended.
History —Jan. 31, 2011, No. 1, § 1116.04, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter F - Entities With Exemption Decree Under Special Laws (§§ 30601 — 30615) › § 30605 - Exemption on excise tax for air carriers

Entities covered under § 194 of this title, better known as the “Air Transportation Act”, as amended.
History —Jan. 31, 2011, No. 1, § 1116.05, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter F - Entities With Exemption Decree Under Special Laws (§§ 30601 — 30615) › § 30606 - Deductions for the revitalization of Santurce

Entities covered under §§ 226 et seq. of Title 23, better known as the “Special Act for the Rehabilitation of Santurce”, as amended.
History —Jan. 31, 2011, No. 1, § 1116.06, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter F - Entities With Exemption Decree Under Special Laws (§§ 30601 — 30615) › § 30607 - Film incentives

Entities covered under §§ 571 et seq. of Title 23, better known as the “Film Industry Development Act”, or any other preceding or successor similar law.
History —Jan. 31, 2011, No. 1, § 1116.07, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter F - Entities With Exemption Decree Under Special Laws (§§ 30601 — 30615) › § 30608 - Santurce theater district

Entities covered under §§ 591 et seq. of Title 23, better known as the “Special Act for the Creation of the Santurce Theater District”.
History —Jan. 31, 2011, No. 1, § 1116.08, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter F - Entities With Exemption Decree Under Special Laws (§§ 30601 — 30615) › § 30609 - Agricultural incentives

Entities covered under §§ 10401 et seq. of this title, better known as the “Puerto Rico Agricultural Tax Incentives Act of 1995”, or any other previous or subsequent similar law.
History —Jan. 31, 2011, No. 1, § 1116.09, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter F - Entities With Exemption Decree Under Special Laws (§§ 30601 — 30615) › § 30610 - Urban centers revitalization

Entities covered under §§ 1095 et seq. of Title 21, better known as the “Urban Centers Revitalization Act”, as amended.
History —Jan. 31, 2011, No. 1, § 1116.10, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter F - Entities With Exemption Decree Under Special Laws (§§ 30601 — 30615) › § 30611 - Revitalization of Ro Piedras

Entities covered under §§ 7001 et seq. of Title 23, better known as the “Special Act for the Rehabilitation of Ro Piedras”.
History —Jan. 31, 2011, No. 1, § 1116.11, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter F - Entities With Exemption Decree Under Special Laws (§§ 30601 — 30615) › § 30612 - Castñer Development

Entities covered under §§ 5201 et seq. of Title 23, better known as the “Special Act for the Development of Castñer”, as amended.
History —Jan. 31, 2011, No. 1, § 1116.12, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter F - Entities With Exemption Decree Under Special Laws (§§ 30601 — 30615) › § 30613 - Solid waste

Entities covered under §§ 10711 et seq. of this title, better known as the “Tax Incentives Act for the Investment in Solid Waste Reduction, Disposal and/or Treatment Facilities”, or any other preceding or successor similar law.
History —Jan. 31, 2011, No. 1, § 1116.13, retroactive to Jan. 1, 2011; Sept. 19, 2014, No. 159, § 6.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter F - Entities With Exemption Decree Under Special Laws (§§ 30601 — 30615) › § 30614 - Green energy

Entities covered under §§ 10421 et seq. of this title, known as the “Green Energy Incentives Act of Puerto Rico”, or any previous or subsequent law similar in nature.
History —Jan. 31, 2011, No. 1, added as § 1116.14 on Dec. 10, 2011, No. 232, § 122.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter F - Entities With Exemption Decree Under Special Laws (§§ 30601 — 30615) › § 30615 - Conservation easement

Conservation easement tax benefit.-The tax benefits received under §§ 785 et seq. of Title 12, known as the “Puerto Rico Conservation Easement Act”.
History —Jan. 31, 2011, No. 1, added as § 1116.15 on Dec. 10, 2011, No. 232, § 123.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter G - Claims Against Transferees and Fiduciaries (§§ 30621 — 30622) › § 30622 - Notice of fiduciary relationship

(a) Fiduciary of the taxpayer. — Upon notice to the Secretary that any person is acting in a fiduciary capacity, such fiduciary shall assume the powers, rights, duties, and privileges of the taxpayer in respect of a tax imposed by this part (except as otherwise specifically provided and except that the tax shall be collected from the estate of the taxpayer), until notice is given that the fiduciary capacity has terminated.
(b) Fiduciary of the transferee. — Upon notice to the Secretary that any person is acting in a fiduciary capacity for a person responsible for the liability specified in § 30621 of this title, such fiduciary on behalf of such person shall assume the powers, rights, duties, and privileges of such person under said section (except that the tax shall be collected from the estate of the taxpayer), until notice is given that the fiduciary capacity has terminated.
(c) Manner of notice. — Notice under subsections (a) or (b) shall be given in accordance with regulations prescribed by the Secretary.
History —Jan. 31, 2011, No. 1, § 1117.02, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART III - Decedent’s Estate and Gifts (§§ 31001 — 31176) › Chapter 1021 - Classification and Application of Provisions and Definitions (§§ 31001 — 31002) › § 31001 - Provision classification and applicability

Classification. — The provisions of this part are hereby classified and designated as follows:
(a) Chapter 1. — Classification and Application of Provisions and Definitions.
(b) Chapter 2. — Decedent’s Estate of Puerto Rico Residents.
(c) Chapter 3. — Decedent’s Estate of Puerto Rico Nonresidents.
(d) Chapter 4. — Taxes on Gifts.
(e) Chapter 5. — Tax Returns, Payment of Taxes, Procedures, and Administration.
History —Jan. 31, 2011, No. 1, § 2010.01, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART III - Decedent’s Estate and Gifts (§§ 31001 — 31176) › Chapter 1022 - Decedent’s Estate; Residents of Puerto Rico (§§ 31011 — 31044) › Subchapter A - Imposition of Tax (§§ 31011 — 31012) › § 31011 - Tax imposition and rates

(a) A tax is hereby imposed on the transfer of the taxable estate, assessed pursuant to § 31031 of this title, of any Puerto Rico decedent, as defined in § 30041 of this title, who dies after December 31, 2010.
(b) The tax imposed by this section shall be ten percent (10%) of the amount of the taxable decedent’s estate.
(c) The tax to be paid on the transfer of the taxable estate of any decedent who was a Puerto Rico resident shall be equal to the tax assessed, pursuant to subsections (b) of this section, minus the credits provided in §§ 31041, 31042 and 31044 of this title.
History —Jan. 31, 2011, No. 1, § 2021.01, retroactive to Jan. 1, 2011; Dec. 10, 2011, No. 232, § 124.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART III - Decedent’s Estate and Gifts (§§ 31001 — 31176) › Chapter 1022 - Decedent’s Estate; Residents of Puerto Rico (§§ 31011 — 31044) › Subchapter A - Imposition of Tax (§§ 31011 — 31012) › § 31012 - Duty to pay tax

(a) General rule. — Any tax imposed by this chapter shall be paid to the Secretary by the executor, who shall be responsible for said tax, subject to the provisions of subsection (b), even if he/she does not come to hold of the property included or includible in the gross decedent’s estate. If the executor were to be relieved by the Secretary of his/her responsibility under this part, the heirs, donees, or beneficiaries shall be severally responsible of the tax until the same has been paid in full.
(b) Requirement of the executor to withhold tax. — The executor shall not pay any amount, nor shall he/she surrender or transfer any property subject to the tax imposed by § 31011 of this title to any person until after having collected and paid to the Secretary the tax thus imposed, except when a lien is cancelled pursuant to the provisions established in § 31162 of this title. If the executor were to dispose in any way of property that is taxable under this part without previous authorization as set forth in § 31162 of this title, he/she shall be personally accountable with his/her property for the tax attributable to the property thus disposed of.
(c) Responsibility of any owner of property. — If an executor has not been designated, or if the same has been designated, there has been a failure to include in the gross decedent’s estate any property whose inclusion in the estate would be pertinent, the person holding the same in the capacity of owner shall be responsible for the payment of the tax that is attributable to the value of the property he/she is holding or owns.
(d) Executor’s release from liability. — After the tax has been paid, the executor may request the Secretary to release him/her from personal liability with respect to the payment of any deficiency assessed under this subtitle in connection with the decedent’s estate. The executor shall be released of the liability imposed on him/her under this part if, within a term of one year as of the date he/she requests such release, the Secretary has not acted upon the request.
(e) Authority of the executor to recover taxes. — The executor, unless otherwise provided in the will and testament, shall recover from the heirs the tax that, in proportion to the total tax paid as may correspond over the property included in the gross decedent’s estate transferrable to each heir, by using the formula as the Secretary determines by regulation.
History —Jan. 31, 2011, No. 1, § 2021.02, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART III - Decedent’s Estate and Gifts (§§ 31001 — 31176) › Chapter 1022 - Decedent’s Estate; Residents of Puerto Rico (§§ 31011 — 31044) › Subchapter B - Gross Decedent’s Estate (§§ 31021 — 31023) › § 31023 - Alternate valuation option regarding property includible in the gross decedent’s estate

(a) In general. — The value of any property includible in the gross decedent’s estate, pursuant to §§ 31021 and 31063 of this title, may be determined as follows, if the executor, executor or trustee so elects:
(1) As for distributed, sold, exchanged or otherwise transferred property within six (6) months following the time of death of the decedent, its value shall be determined on the date of the distribution, sale, exchange or any other transfer.
(2) As for property not distributed, sold, exchanged or otherwise transferred within six (6) months following the time of death of the decedent, its value shall be determined on the date within the six (6)-month term following the time of death of the decedent.
(3) Any interest or property affected by the mere passage of time shall be included in the gross decedent’s estate, with its market value at the time of death of the decedent (in lieu of the later date), adjusted by any difference in value on the later date, which difference has not been caused by the mere passage of time, which date may never be after the due date for filing the appropriate tax return.
(b) Time to make the election. — The election set forth in this section shall be made by the executor, executor or trustee not later than the date provided in this part to file tax returns or statements or before the due date of the time extension granted to that effect to file such returns or statements, pursuant to the regulations that the Secretary may promulgate to such effect.
History —Jan. 31, 2011, No. 1, § 2022.03, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART III - Decedent’s Estate and Gifts (§§ 31001 — 31176) › Chapter 1022 - Decedent’s Estate; Residents of Puerto Rico (§§ 31011 — 31044) › Subchapter C - Taxable Decedent’s Estate (§§ 31031 — 31038) › § 31031 - Determining the value of the taxable decedent’s estate

For purposes of the tax imposed by § 31011 of this title, the value of the taxable decedent’s estate shall be determined by deducting from the gross decedent’s estate the exemptions and deductions set forth in this subchapter.
History —Jan. 31, 2011, No. 1, § 2023.01, retroactive to Jan. 1, 2011.