Hey Guys, I live in Pennsylvania and I am seriously considering moving to Puerto Rico to take advantage of Act 20/22. One of the main reasons is that I have substantial capital appreciation through my crypto currency holdings. I've just learned that any capital gains are only tax fee from the time I became a PR resident, so that any capital appreciation prior to moving would still be taxed at the US rate.
Now I came up with a new idea and wanted to check if that would work. Crypto currencies such as Bitcoins are considered property for purpose of the IRS and as far as I understand if I fund a corporation with property in exchange for equity the cost basis is just moved to the corporation and not taxable event occurs. So if I fund my PR Act 22 company with bitcoins and then sell these bitcoins to fund my operations and to trade I would pay the 4% corporate rate and eventually could pay dividends to myself as a Act 20 PR resident at 0%.
Am I missing something here?
Thank you very much!