The Tax Cuts and Jobs Act of 2017 and Puerto Rico Act 60-2019 offer radical tax breaks to investors.

3 Key Benefits of Qualified Opportunity Funds

  1. Taxpayers may defer paying tax on capital gains, if such capital gains are invested in a QOF, within 180 days from the gain. The deferral period ends the earlier of when the tax-payer sells its interest in the QOF or December 20, 2026.
  2. Investments held for 5 years prior to December 31, 2026 will also qualify for a 10% increase in the tax-payer’s tax basis of the amount of the deferred gain.
  3. Any taxpayer that holds its investment for a minimum of 10 years, can achieve no capital gain tax on the appreciation of its investment.

Investing in the Future of Puerto Rico

At MCP, we follow ESG principles to guide our investment decisions. Our goal is to make investment that will make an impact in the quality of life of the residents of Puerto Rico, by investing in companies and projects that have in the environment, the economy and the infrastructure of Puerto Rico.

We are committed to Opportunity Zones, Impact Investing, and Puerto Rico.

3 Key Benefits of Puerto Rico Private Equity Funds

  1. Puerto Rico Taxpayers may receive up to a 60% tax deduction, on its investment in the PR Private Equity Fund. The tax deduction can be used for up to 30% of the taxable income per year for 15 years.
  2. Zero Tax, on PR sourced capital gains.
  3. 10% Tax rate, dividends, distributions,  and non PR source capital gains.


Frequently Asked Questions

Individuals who are realizing a capital gain across all asset classes can invest those monies on a tax deferred basis, as long their gain is invested in a qualified opportunity fund within 180 days of the sale or exchange.  The process is very easy. Agree to subscription agreement, transfer funds, receive stock certificate and tax statement.  The whole process is usually completed within 48 to 72 hours.

In certain situations where an individual is facing the expiration of the 180 day window we can expedite the process to same day.

The capital gains must be invested in qualified opportunity funds that have 90% of their assets invested in qualified opportunity zones. Non capital gain money can be invested into opportunity funds however there would not step up in tax basis benefits for earnings of non capital gain money.

All capital gains on the sale or or exchange of any property to an unrelated party invested within 180 days are eligible for the tax benefits.

The minimum investment is $100,000.

Yes. Opportunity Funds are designed to be easier with less hassle than 1031 Exchanges.

A partnership interest is an eligible investment. The Puerto Rico Opportunity Zone Fund (PROZ) is a limited partnership. Meaning you are only investing in the assets held by the fund.

Investors can invest in opportunity funds by selling an asset and triggering a capital gain, then subsequently placing that gain in a qualified opportunity fund with 180 days of the original sale. There is a subscription agreement that is signed by the investor and a wire transfer agreement. This is then followed by an execution of the agreement with a wire transfer into opportunity fund account.

Investors have 180 days to invest realized capital gains.

No. You can take receipt of the gains, as long as you reinvest within 180 days. As an Opportunity Fund we have to certify with the IRS. You receive a tax statement at the end of the year.

In part. The original taxes are deferred until December 31, 2026 (or the date of a sale, whichever is earlier). Investors will have to recognize a portion of the deferred gains that year. Investors may benefit from the step up in basis at years 5 (10%) and 7 (another 5%) if they reach either holding period before December 31, 2026.

Opportunity zones are currently being designated by the governors of each state. Each state may designate 25% of the eligible census tracts in their state. As of right now, all 50 states and Puerto Rico have submitted and have been approved for designated Opportunity Zones.

No. Opportunity zones must meet certain criteria to qualify. Census tracts with over 20% poverty and median family income no greater than 80% of the area medium will qualify. There are also contiguous zones, which are census tracts that are adjacent to a designated opportunity zone, and also do not exceed 125% of the median family income of that same opportunity zone.

New monies can be invested in an opportunity fund, however the investor would not enjoy the same tax benefits as realized capital gains.

Investing in the future of Puerto Rico
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