Spdr Gold

[Lion]

Sale of shares in SPDR Gold Tr Gold Shs show up on her 1099-B & gain/loss statement with no notes. Long term. But, do these get taxed as gold, collectibles, 28%?

[Koss]

SPDR Gold Trust

Yes, it is treated as a collectible.

I decided to look this one up. Blew my mind. SPDR shares behave like stock, so I thought the collectibles rule wouldn't apply. The problem is that the trust actually buys and sells gold bars. There are other funds out there that invest in precious metals indirectly, by buying stock in mining companies, and other related concerns. But the SPDR Gold Trust actually owns gold bullion. So the investor holds an indirect interest in raw gold.

Here's a link to the prospectus. The table of contents has a section called United States Federal Tax Consequences.

http://www.spdrgoldshares.com/media/GLD/file/SPDRGoldTrustProspectus.pdf

Geez... for some reason, in this little community we have here, this is the weekend of investment products that look like stocks, but in reality are... something else.

I asked about BPT, an investment trust that holds rights to oil production in Prudhoe Bay. skdoorn12 had a client who was trading the Proshares Ultra Silver fund, and got a really bizarre Schedule K-1. And now Lion's got someone with the SPDR Gold Trust.

These things are traded on the NYSE or NASDAQ, and in most cases they are marginable and can even be sold short. Some of them even have options.

But they are not stocks, and they are not mutual funds. I think a lot of inexperienced investors don't understand this.

BMK

[DonPriebe]

I have a client that holds IShares Gold Trust (IAU). Like SPDR Gold, this is an entity that looks and trades like an EFT, but is actually a Trust holding only physical gold.

The booklet describing how to account for this gem on your income tax return is available at https://materials.proxyvote.com/RYLTST11 Most of the booklet is devoted to a table that gives the price of gold ON A DAILY BASIS for all of 2011. This is so you can convert your dollar investments into ounces of gold, and thus calculate the gain for each time you sold gold during 2011.

What? You say you didn't sell any of your gold? You're just holding it for a long-term investment? Au contraire mon ami! As the booklet explains, gold bullion generates no interest or earnings, but the trust does have expenses such as storage, insurance and management fees. To get the cash to pay these expenses, the trustees have to sell a little bit of your gold every month. At varying prices. But not to worry - it's deductible as an investment expense subject to the 2% exclusion.

And since IAU is not a stock, and is not an EFT, the brokerage does NOT have to provide you with basis data, at least not for 2011 or 2012.

Happy figuring!

[Lion]

Thank You, Everyone

I love learning new things, but not so much in April when I'm already sleep deprived. Thought I remembered something about SPDR Gold from a post or buried in a class or something, so very glad I asked. Thank you for the information and for the link and for having my back.