P.R. Laws tit. 13, § 30125
(a) In the case of an individual, losses sustained during the taxable year and not compensated for by insurance or otherwise:
(1) If incurred in trade or business shall be allowed against the net income of the trade or business, or
(2) if incurred in any transaction entered into for profit, though not connected with the trade or business, the deduction shall be limited to the income generated by said for profit transaction.
(b) Losses by corporations.— In the case of a corporation, losses sustained during the taxable year and not compensated for by insurance or otherwise shall be allowed as a deduction against gross income.
(c) Capital losses.—
(1) Limitation.— Losses from sales or exchanges of capital assets shall be allowed only to the extent provided in § 30141 of this title.
(2) Securities becoming worthless.— If any securities, as defined in clause (3) of this subsection, become worthless during the taxable year and are capital assets, the loss resulting therefrom shall, for purposes of this part, be considered as a loss from the sale or exchange of capital assets, on the last day of such taxable year.
(3) Definition of securities.— As used in clause (2) the term “securities” means:
(A) Shares of stock in a corporation, and
(B) rights to subscribe for or to receive such shares.
(4) Stock in affiliate corporation.— For purposes of clause (2), stock in a corporation affiliated with the taxpayer shall not be considered a capital asset. For purposes of this clause a corporation shall be deemed to be affiliated with the taxpayer only if:
(A) At least ninety-five percent (95%) of each class of its stock is owned directly by the taxpayer; and
(B) more than ninety percent (90%) of the aggregate of its gross income for all taxable years has been from sources other than royalties, rents (except rents derived from rental of properties to employees of the company in the ordinary course of its operating business), dividends, interest (except interest received on deferred purchase price of operating assets sold), annuities, or gains from sales or exchanges of stocks and securities, and
(C) the taxpayer is a domestic corporation.
(d) Wagering losses.— Losses from wagering transactions shall be allowed only to the extent of the gains from such transactions.
(e) Basis for determining loss.— The basis for determining the amount of deduction for losses sustained, to be allowed in accordance with subsections (a) or (b) of this section, and for bad debts, to be allowed under § 30126 of this title, shall be the adjusted basis provided in § 30142(b) of this title for determining the loss from the sale or other disposition of property.
History —Jan. 31, 2011, No. 1, § 1033.05, retroactive to Jan. 1, 2011; Dec. 10, 2011, No. 232, § 27.