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The TAX Conquences of Owning of Gold vs miners


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#1 Rogerdodger

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Posted 18 March 2021 - 03:38 PM

Anyone out there know the answer to this?

Is it better tax-wise to own a gold miner rather than physical Gold or gold ETFS?

Would GDX be better tax-wise than GLD?

Does trading in a ROTH shield you?

 

Disclaimer: this is quoted from Sprott Physical Bullion Trusts, a Gold "Trust" sales article:

 

Owning gold and precious metals doesn't have to be taxing

 

2020 was a tremendous year for precious metals investments. Gold bullion gained 25.12% in 2020. Silver bullion rose 47.89%. Palladium climbed 25.86% and platinum increased 10.92%.1 Tax time is here, and it is critically important for investors — especially after a strong year like 2020 — to understand the potential tax ramifications of owning physical precious metals. 

For many U.S. investors the returns provided by owning physical gold — and the other precious metals including silver, platinum and palladium — come with a sobering surprise when the assets are sold and it’s time to pay taxes. The reason: The U.S. Internal Revenue Service (IRS) categorizes gold and other precious metals as "collectibles" which are taxed at a 28% long-term capital gains rate. Gains on most other assets held for more than one year are subject to the 15% or 20% long-term capital gains rates. 

According to the IRS2: "Collectibles include works of art, rugs, antiques, metals (such as gold, silver, platinum and palladium bullion), gems, stamps, coins, alcoholic beverages and certain other tangible properties."

Collectibles are Taxed at 28%

This is the case not just for gold coins and bars but also for most ETFs (exchange-traded funds) which are taxed at 28%. Many investors, including financial advisors, run into trouble owning these investments. They assume, incorrectly, that because the gold ETF trades like a stock that it will also be taxed like a stock, which are subject to the long-term capital gains rate of 15% or 20%.


Edited by Rogerdodger, 18 March 2021 - 03:40 PM.


#2 Smithy

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Posted 19 March 2021 - 03:40 PM

" Both GLD and SLV are taxed as collectibles at the higher 28% tax rate no matter how long you've held them versus 15% for Long Term capital gains if you hold PHYS and PSLV for over a year."

 

Hope this helps.



#3 sea-bill

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Posted 19 March 2021 - 04:23 PM

ROTH IRA is funded with post tax dollars.  no tax due on trades or proceeds.  withdrawal rules are age based

 

not sure about holding true physical in a ROTH


Edited by sea-bill, 19 March 2021 - 04:25 PM.


#4 Rogerdodger

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Posted 19 March 2021 - 05:07 PM

All my trading is in a ROTH.

I converted a SEP last year into ROTH. Kinda Backdoor as they call it.

Sure makes tax day simpler...if that's even possible.



#5 SemiBizz

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Posted 20 March 2021 - 10:33 AM

Physical Gold should never be bought with the idea of selling it.

 

It is overpriced here.

 

Not a good time to buy unless you plan to hold it forever...

 

Anytime is a good time to buy if that's your plan.

 

 

GLD tested the VOLUME HIGH from 2011 on Lighter Volume and it was REJECTED... so that's going LOWER as it stands now...

 

 

 

XAU is going much lower

 


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#6 SemiBizz

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Posted 20 March 2021 - 10:55 AM

Targeting 1525 on Gold.


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Richard Wyckoff - "Whenever you find hope or fear warping judgment, close out your position"

Volume is the only vote that matters... the ultimate sentiment poll.

http://twitter.com/VolumeDynamics  http://parler.com/Volumedynamics

#7 dougie

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Posted 21 March 2021 - 03:40 PM

Targeting 1525 on Gold.

well you are known for bold calls. Any dates on your target?