P.R. Laws tit. 7, § 1256
(a) Every loss from the sale, exchange or other disposition of an investment in eligible proprietary interests of a fund or a designated entity shall be deemed as a capital loss.
(b) Notwithstanding the provisions of subsection (a), the taxpayer, at his/her option, may take the amount of said loss as a credit against the tax determined in the taxable year of said loss and for the following four (4) taxable years. The amount of the loss that he/she may take as a credit during each one of the abovementioned taxable years shall not exceed one third (1 / 3) of the amount of the loss.
(c) Any excess in the credit assigned by subsection (b) on the tax determined for said five (5) taxable years shall not be taken as a deduction or credit, or backdated or carried over to another taxable year.
(d) Assignment of credit. —
(1) The credit for loss provided by subsection (b) of this section may be assigned, sold or otherwise transferred, in whole or in part, by an investor to any other person. The person acquiring the credit may claim a credit against his/her income tax for the amount of the credit assigned.
(2) The property moneys or securities received by the assigning investor shall be exempted from taxation under §§ 8401 et seq. of Title 13, up to the amount of the credit for loss assigned.
(3) When the person acquiring the credit for loss also acquires a proprietary interest in the fund or designated entity with regard to which the credit for loss arises, the tax base of said purchaser of the proprietary interest shall not be increased by the amount of the credit for loss acquired.
(4) The investor who has assigned all or part of his/her credit for loss, and the person acquiring said credit for loss shall notify the assignment to the Secretary through a statement to such effects, which shall be included with their respective income tax returns for the year in which the assignment of the credit for loss was made. The statement shall include such information required by the Secretary through regulations.
History —Oct. 6, 1987, No. 3, p. 840, § 16, renumbered as § 17 and amended on July 11, 1996, No. 70, § 17.