Fair Taxation of Digital Assets in Puerto Rico Act of 2025
Officially: “Fair Taxation of Digital Assets in Puerto Rico Act of 2025” Read the full text
What it does
Read it in plain language
1Short title
This section would give the Act the short title the Fair Taxation of Digital Assets in Puerto Rico Act of 2025.
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1. Short title This Act may be cited as the Fair Taxation of Digital Assets in Puerto Rico Act of 2025 .
2Treatment of digital asset income by Puerto Rican residents
This section would add a new rule to section 865 of the Internal Revenue Code of 1986 covering the tax treatment of digital asset income for individuals described in section 933, referred to elsewhere in this Act as Puerto Rican residents. Under the new rule, any income these individuals receive from mining, staking, or a similar activity involving a digital asset; from holding a digital asset, including any fork or air drop of a digital asset; or from the sale, exchange, or other disposition of a digital asset would not be treated as income derived from sources within Puerto Rico, regardless of any other provision of the tax code. Any financial interest in a digital asset would count as a digital asset for purposes of this rule. A digital asset would be defined as any digital representation of value that is recorded on a cryptographically secured distributed ledger. This change would apply to tax years beginning after the date this Act is enacted.
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2. Treatment of digital asset income by Puerto Rican residents (a) In general Section 865 of the Internal Revenue Code of 1986 is amended by redesignating subsections (i) and (j) as subsections (j) and (k) and by inserting after subsection (h) the following new subsection: (i) Digital asset income of Puerto Rican residents (1) In general Notwithstanding any other provision of this title, in the case of an individual described in section 933, any income derived in connection with— (A) any receipt of any digital asset in connection with— (i) mining, staking, or any similar activity with respect to any digital asset, or (ii) holding any digital asset (including any fork or air drop of any digital asset), or (B) any sale, exchange, or other disposition of a digital asset, shall not be treated for purposes of this title as derived from sources within Puerto Rico. (2) Treatment of financial interests For purposes of this subsection, any financial interest in a digital asset shall be treated as a digital asset. (3) Digital asset For purposes of this subsection, the term digital asset means any digital representation of value which is recorded on a cryptographically-secured distributed ledger. . (b) Effective date The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act.
Where it is
In the House.