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When you leave your 401(k) to a child who lives in Puerto Rico, there are potential tax implications at both the federal and local levels. At the federal level, the beneficiary will typically be subject to income tax on the distributions from the inherited 401(k). In Puerto Rico, residents are generally not subject to federal income tax on income earned within the territory. However, if the 401(k) plan was established in the U.S., the distributions from the plan are likely considered U.S.-source income, and your child might be subject to U.S. federal income tax on the inherited 401(k) distributions, regardless of their residence in Puerto Rico. As for Puerto Rico's local taxes, the tax treatment of inherited 401(k) distributions may depend on the specific rules and regulations in place at the time the distributions are made. The tax laws in Puerto Rico can change, and it's essential to consult with a tax professional familiar with Puerto Rico's tax laws to understand the local tax implications. Remember, I'm not a tax professional, and this is just a general explanation. It's always a good idea to consult with a tax expert to understand the specific rules that apply to your situation.