Crypto Taxes #1 – Researching Act 20 & Act 22 Tax Benefits In Puerto Rico

What’s up, guys? This is Tai Zen. I’m broadcasting from the area called Paraeso and it’s like South of the Botanical Gardens in the city of San Juan on the island of Puerto Rico. The reason why I’m here is that I’m here as part of our boots on the ground investing approach.

There’s so much stuff coming out now. In 2017, 2018 so many ICO, so many different projects coming out that our teams of philosophy are that you know, we’re gonna put boots on the ground, foot on the ground to go and investigate and research that before we make any decisions, right?

So, I’m here in San Juan, Puerto Rico to research the 20 and 22, tax laws that are here to see how it can benefit our team in the blockchain investing and the cryptocurrency trading and investing space. Word on the street is that if you become a resident of Puerto Rico, you don’t have to pay capital gains tax.

You pay 0% capital gains tax and based on the research that I and our team members including LeonFu.com, the Honourable Grandmaster legendary world-renowned LeonFu.com. I have researched and it proves to be true that if you show that you are a resident of the island of Puerto Rico which is a territory of the United States, it’s not a state, it’s a considered a very poor island and because of that, they have lobbied for many years to become a 51st state of the United States of America.

But it has been declined and I think the island currently owes the United States like 70 or 80 billion dollars or something like that. I don’t see how it’s going to be paid back anytime soon. Based on the conditions of the island, I don’t think that the American people are going to want to assume that debt and spend the money to rebuild the island and make it more modern.

Because it’s very old and very run down. We’re here and what they did was to revitalize the island after years of depression, recession. I don’t know what you call it, but of years of bad economics here they’re offering the incentives for businesses and individuals to come here to the island.

It’s called act 20 and act 22. I can’t remember which one’s which I always get mixed up but one of them is to offer businesses. One is to incentivize businesses and the other one is to incentivize individuals.

The act that is designed to incentivize businesses is to offer them a maximum of a 4% corporate tax if they decide to relocate their business to the island of Puerto Rico and hire at least 5 residents of Puerto Rico to work for their business. I think recently they’ve even had some changes in the new Trump tax law or somewhere I read I forget.

I’m not sure if it’s 100% accurate or not, but there’s the word on the street is that they’re trying to make it so that you only have to hire like 1 person instead of 5 residents. You don’t have to hire, like 1 resident Puerto Rico for your business to comply, okay?

So now, then the other act, I think it acts 22. It’s designed to incentivize individuals to come who make their money off of capital gains. A capital gain is anything that any kind of asset or investment that you get into and you hold it for more than 12 months consecutively or more than 1 year.

That would be considered capital gains tax and in the US right now the capital gains tax is set at 15 and 20%, so it’s like 0% up to like 77 thousand dollars or something like that. Then if you make a million Dollars the first 77 thousand Dollars, you pay 0% capital gains tax.

That’s for long-term capital gains by the way. Between 78 thousand to like 477 thousand somewhere around there, my numbers are not accurate, so don’t go on it, but it’s somewhere around that area.

You pay like a 15% long-term capital gains tax and then anything that’s above the 477 thousand upon up, that’s like 20% capital gains. I remember doing some quick math that if I were to pull out like 1 million Dollars in long-term capital gains profit from investing in cryptocurrencies, I think the tax rate was like 164 thousand which is like 16.4% on that.

I’m not one of the aging guys. That I’m good with math. I’m a licensed CPA, I’m not a licensed tax attorney. Don’t take anything that I say to be accurate, okay?

I’m just letting you guys know that I just researched this stuff online and I’m just sharing it back with you. Based on this information, it sounded too good to be true that a nation or a territory or a state would offer 0% capital gains.

That means that if I become a resident of Puerto Rico and I move my business nowhere to Puerto Rico, then I only have to pay 4% business taxes. Then I only have to pay 0% on my long-term capital gains because all my income right now but the majority of it comes from capital gains from long term capital gains from cryptocurrencies I invested in.

Several years ago, if you guys been watching my channel for a while you guys know that I’ve been in the crypto investing space for over 4.5 years. Everyone on our team did really well so we’re looking for ways to effectively and legally manage our taxes correctly in the US and the territories within the US.

Puerto Rico is not a state. It’s a territory of the United States. However, all the people here are treated as Americans, ok? So, we’re here to see if the conditions on the island are livable meaning that can my wife my kids and myself feel safe here?

Now, many of you guys have been following me. You guys know that I grew up in the projects East of Houston. It’s rare that I ever go to any poor neighborhood that I’m scared of. I have no problems with that.

However, my wife and kids are a lot different. They didn’t grow up in a neighborhood where every neighbor was selling crack or smoking crack. Because of that, they’re not accustomed to that type of neighborhood and I custom to living in a poor neighborhood as I did.

Because of that, I want to make sure that this neighborhood even though I can tolerate it, I want to make sure that it’s something that my wife and kids can also tolerate, in my in-laws also. Because of that, that’s why we’re here in San Juan, in the city, the capital, is the largest city on the island.

We’re here to investigate and research and to see if the conditions are livable then we may consider relocating to the island of Puerto Rico and becoming a resident here to help with our cryptocurrency long-term capital gains taxes in our business taxes. Because we plan on opening up the Typhoo OTC trade desk in 2018.

Once we finish getting the licensing and the registrations are done for that with the US government and they give us the green light to be able to operate ours Over The Countertrade desk. In case you guys are new to trading investing and OTC trade desk stands for Over The Counter trading.

It’s just a fancy word that means that we’re allowed to buy and sell cryptocurrencies off the exchange so that if someone wants to buy you know, $25,000 USD with the Bitcoins or $50,000 USD with the Ethers or anything like that, they can just call us up and then we can process the order for them and fill the order for them.

We basically take the other side of the trade that people want to buy and sell so that’s what that means. The difference between going through our Typhoo trade desk and go into like a coin base or a buy enhance or Apollonius is that we don’t hold on to your cryptocurrencies and we don’t hold on to your or US Dollars or your Pam or any type of funds that you have.

What will happen is that you call us up and you say you want to buy $25,000 USD with the Bitcoins and if we have it available, then we’ll sell it to you at a few percentage point markup or things like that. Or you want to sell to us then we’ll take it off your hands and then charge a few percentage point marks on it, okay?

So that’s what the OTC trade desk is and that’s the difference between that and regular exchange. So, we’re considering doing that and probably if the tax laws work here in Puerto Rico and it’s beneficial to our business then we will consider relocating here.

If not, then we would just stay in the state of Texas because, in the US, the state that has the most favorable business laws towards businesses is in the great state of Texas. You often hear me say that it’s a country because it’s so big and most of the people that live in Texas or residents of the state of Texas are usually proud to be there and happy to be there.

So, they usually refer to as a country because they do a lot of things different and have a lot more freedom in Texas and probably any other state in the United States. Those are things that I want to share with you guys. Then as we learn more about the island that Puerto Rico and its laws and stuff then right now, we’re just assessing the real estate situation first to see if it’s even livable.

If it’s doesn’t meet our living requirements then there’s no point in even taking a deep dive into what the taxes and the business laws are like in Puerto Rico. If it’s not worth living here okay, so I will share this before I conclude this video one of the strangest things that I’ve seen in Puerto Rico that really caught me by surprise.

It is all the spider-man grade burglar bars, pretty much the majority or almost every resident that I have seen in the city of San Juan so far has burglar bars on their house. They have steel gates in front of their house.

Once you get past the steel gates, there’s some type of burglar bars to get to the front door the house and every window in the house there are burglar bars on it. The reason why I call him spider-man grade burglar bars is because I’ve been to a lot of ghettos in America before but I’ve never seen anybody put burglar bars on the 3rd floor, 4th floor, 5th floor, 6th floor, 7th floor.

It doesn’t matter how big the condo unit or the residential places, they put burglar bars on damn near every floor. The only reason why I call it spider-man great burglar bars is because the only people I can think of that can climb to the 3rd or 4th floor to break into somebody’s residence is spider-man.

Unless you’re a spider-man, I really don’t understand how someone can climb to the 5th floor and break into somebody’s house. Why is there a need to have burglar bars on the 3rd, 4th, 5th, and 6th floor and above?

If you guys know that, please explain it to me. I would be open-minded to listen to why there are spider-man grade burglar bars in Puerto Rico. I’m not trying to be funny, it’s just interesting to me.

Why those burglar bars are so high up in the air, you know? So, thanks for watching this video guys. If you guys like this type of boots-on-the-ground type of investing research and tax research as what we’re doing in this video, then give me a thumbs up and I’ll make more videos like this.

If you guys don’t like it give me a thumbs down and I’ll stop making them. If you guys want more updates to make sure you go to www.cryptocurrency.market, slash, newsletter and subscribe to our newsletter there. Also, make sure you follow me on Twitter at @HeyTaiZen, spell just like you hear it and @HeyTaiZen. So I’ll see you guys in the next video.

 

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