P.R. Laws tit. 13, § 886
(a) There shall be exempt from taxation under §§ 881—905 of this title, and excluded from the total of taxable gifts: (1) the first thousand (1,000) dollars of the total gifts received by the recipient; (2) the first five thousand (5,000) dollars of the total gifts received by a recipient who is the spouse of the donor, or his relative in the first or second degrees of consanguinity or affinity; (3) the first ten thousand (10,000) dollars of the total amount of ordinary life or endowment insurance or deriving from any life rent or annuity or insurance contract on the life of the insured, including in said total any amount payable to the heirs or beneficiaries of members of a retirement system of those mentioned in § 881(a) of this title, by reason of death benefit of the participant or member of any such system, whatever the number of beneficiaries, provided they are the surviving spouse and/or relatives in the first or second degree of consanguinity or affinity.
(b) In the case of property passing at death to minor children, whether legitimate, adopted, or natural of the decedent, there shall be allowed, in addition to the exemption provided in subsection (a) of this section, an exemption of two hundred (200) dollars for each year by which such dependent is less than twenty-one (21) years old on the date of death. In the case of property transferred by inheritance to children of the decedent, whether legitimate, adopted, or natural, who have been declared by a competent court permanently physically or mentally disabled, an additional exemption of twenty thousand (20,000) dollars shall be granted.
(c) Gifts made to or for the benefit of:
(1) The Commonwealth of Puerto Rico, the United States of America, any state, territory, or any political subdivision thereof, or the District of Columbia, for exclusively public purposes.
(2) A corporation, association, or trust, or community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, literary, educational, cultural, social, or public welfare purposes; including the encouragement of art and the prevention of cruelty to children or animals; no part of the net earnings of which inures to the benefit of any private shareholder or individual, and no substantial part of the activities of which is carrying on propaganda, for securing the enactment of particular legislation, or otherwise attempting to influence the enactment thereof; Provided, That the political parties organized under the Election Law of Puerto Rico shall not be included among the associations referred to in the provisions of this section.
(3) A fraternal society, order, or association, operating under the lodge system, but only if such gifts are to be used exclusively for religious, charitable, scientific, literary, or educational purposes, including the encouragement of art and the prevention of cruelty to children or animals.
(4) Posts or organizations of war veterans, or auxiliary units or societies of any such posts or organizations, if such posts, organizations, units, or societies are organized in Puerto Rico or in the United States or any of its possessions, and if not part of their net earnings inures to the benefit of any private shareholder or individual.
(5) The special fund for vocational rehabilitation authorized by § 12 of the World War Veterans’ Act, 1924, 43 Stat. 611 (U.S.C., Title 38, § 440); shall be exempt from the payment of taxes under §§ 881—905 of this title.
(d) There shall also be exempted from taxes, under the provisions of §§ 881—905 of this title, any transfer, by gift or by reason of the death of a person, of bonds, promissory notes or other obligations issued or to be issued by the Commonwealth or by its municipalities or by the authorities or public corporations, both of the Commonwealth and of the municipalities for money borrowed when both the donor and the recipient are not residents of the Commonwealth. The place where such bonds, notes and other obligations are located shall not be taken into consideration on determining whether the exemption is valid.
History —Apr. 12, 1946, No. 303, p. 782, § 4; Dec. 27, 1946, No. 10, p. 108; Feb. 16, 1955, No. 4, p. 18, § 2; Apr. 9, 1956, No. 6, p. 12; June 13, 1964, No. 49, p. 115, § 2; Apr. 19, 1968, No. 23, p. 40, § 1, retroactive to Jan. 1, 1967.