#48625
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Anonymous
Survivalist

Certain types of bonds are also not taxable – as INCOME. I don’t know about capital gains taxes in PR, but you and I and everybody else in CONUS (including AK and HI) can invest (or at least could) in Puerto Rican municipal bonds and get double tax free status out of them (meaning the income from them). You buy a bond, they pay an agreed upon interest (unless they default, like PR has done), and at the end of the 10, 20, 30, or whatever year point, they then give you your principal back. That’s how bonds work. And the interest payments on various types of municipal (government or government agency type) bonds are non-taxable at either/both the federal and state levels, depending on various rules. And if a bond is held to maturity just for the purposes of getting the tax free interest, there’s no capital gain at the end – just return of original principal, thus no taxes for any reason. In this respect, PR bonds aren’t all that different from a bond issued by your state or city (though there are some differences, I’m just not up on the details of the PR bonds that have now been defaulted on).