Is gld taxed at 28%?

For these purposes, profits recognized by an individual on the sale of GLD shares held for more than one year, or attributable to the sale by the Trust of any gold bullion that the shareholder is treated (through his or her share ownership) as held for more than one year, will generally be taxed at a maximum of This is the case not only for gold coins and bars, but also for most ETFs (exchange-traded funds) that are taxed at 28%. Many investors, including financial advisors, have trouble owning these investments. They incorrectly assume that because the gold ETF is listed as a stock, it will also be taxed as a stock, which is subject to the long-term capital gains rate of 15% or 20%. Investors often perceive the high costs of owning gold as dealer margins and physical gold storage fees, or management fees and trading costs for gold funds.

In reality, taxes can represent a significant cost in owning gold and other precious metals. Fortunately, there is a relatively easy way to minimize the tax consequences of owning gold and other precious metals. Individual investors, Sprott's physical bullion trusts may offer more favorable tax treatment than comparable ETFs. Because trusts are domiciled in Canada and classified as Passive Foreign Investment Companies (PFICs), U.S.

In the US, they are eligible for standard long-term capital gains rates on the sale or redemption of their shares. Again, these rates are 15% or 20%, depending on revenue, for units held for more than one year at the time of sale. While no investor likes filling out additional tax forms, the tax savings of owning gold through one of Sprott's physical bullion trusts and holding the annual elections can be worthwhile. To learn more about Sprott Physical Bullion Trusts, ask your financial advisor or Sprott representative for more information.

Royal Bank Plaza, South Tower 200 Bay Street Suite 2600 Toronto, Ontario M5J 2J1 Canada. Gold's long-term gains are taxed at 28%, which is almost double the 15% tax rate offered by similar gains on stocks and bonds. Short-term gold profits are taxed at the investor's ordinary income rate, which is similar to the way short-term profits of mutual funds and equities are taxed. Investors in a Roth IRA pay income tax upfront on a purchase, but all future growth is tax-free; investors with a pre-tax IRA pay their regular income tax rates when they withdraw money in retirement.

The ETF's tax treatment will depend on the amount of the fund that is invested in physical gold against any asset that is linked to the price of gold. An increasingly popular investment in gold is SPDR Gold Shares (GLD), a publicly traded fund of State Street Global Advisors.

Alonzo Supplee
Alonzo Supplee

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