Gold ETFs (IAU, GLD, SGOL) in a taxable account.....dividends and capital gains?

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ualdriver
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Gold ETFs (IAU, GLD, SGOL) in a taxable account.....dividends and capital gains?

Post by ualdriver » Fri Jun 01, 2018 4:40 am

If one holds a gold ETF like IAU, GLD, or SGOL in a taxable account, I assume that these ETFs will not throw off capital gains or dividends that will be reported on a 1099 every year? The only taxable event will be upon the sale of the shares, correct? (unfortunately likely at the unfavorable "collectible" tax rate?)

Thanks

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Re: Gold ETFs (IAU, GLD, SGOL) in a taxable account.....dividends and capital gains?

Post by crumbgrabber » Fri Jun 01, 2018 7:02 am

These types of funds do indeed result in messy taxes. They cover costs by selling a small amount every month for each lot you own. I own about a half dozen lots of IAU and get 6 x 12 transactions in my 1099. I am not sure how this affects things like tax loss harvesting since these events are only recorded in March after the tax year is over. Also, my 1099 is always delayed, presumably due to these calculations.

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Re: Gold ETFs (IAU, GLD, SGOL) in a taxable account.....dividends and capital gains?

Post by ualdriver » Fri Jun 01, 2018 7:44 am

crumbgrabber wrote:
Fri Jun 01, 2018 7:02 am
These types of funds do indeed result in messy taxes. They cover costs by selling a small amount every month for each lot you own. I own about a half dozen lots of IAU and get 6 x 12 transactions in my 1099. I am not sure how this affects things like tax loss harvesting since these events are only recorded in March after the tax year is over. Also, my 1099 is always delayed, presumably due to these calculations.
So if I'm understanding you correctly, you're getting a 1099B with 6 to 12 transactions per year due to the IAU ETF selling gold to cover expenses?

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Re: Gold ETFs (IAU, GLD, SGOL) in a taxable account.....dividends and capital gains?

Post by crumbgrabber » Fri Jun 01, 2018 9:24 am

Yes but I get more like 72 transactions. One sale for each lot, each month.

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Re: Gold ETFs (IAU, GLD, SGOL) in a taxable account.....dividends and capital gains?

Post by David Jay » Fri Jun 01, 2018 10:13 am

Commodities do not have dividends (no earnings or interest income). A fund might, depending on how it is designed. If it holds physical gold, then it should not. To quote Warren Buffett:

"The problem with commodities is that you are betting on what someone else would pay for them in six months. The commodity itself isn't going to do anything for you….it is an entirely different game to buy a lump of something and hope that somebody else pays you more for that lump two years from now than it is to buy something that you expect to produce income for you over time."
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

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Re: Gold ETFs (IAU, GLD, SGOL) in a taxable account.....dividends and capital gains?

Post by MP123 » Fri Jun 01, 2018 10:47 am

crumbgrabber wrote:
Fri Jun 01, 2018 9:24 am
Yes but I get more like 72 transactions. One sale for each lot, each month.
I've held IAU for a number of years and never had any dividends or reportable 1099 activity. I wonder if you don't have something else going on?

It is taxed as a collectible at 28%/35% rates though.

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Re: Gold ETFs (IAU, GLD, SGOL) in a taxable account.....dividends and capital gains?

Post by crumbgrabber » Fri Jun 01, 2018 11:04 am

These aren't dividends, they are sales to cover expenses. I use Fidelity and both IAU and GLD demonstrate this behavior. Perhaps I see these because I don't reinvest dividends automatically? I don't really know...for the amounts I own these are very small dollar amounts annually (~$5 total) so I haven't deemed it worthwhile to really investigate with Fidelity. Yet here I am discussing it on a forum!

If you don't see these expenses in your own brokerage, where do the expenses come from? These ETFs are not free to own! This is the reason these ETFs' share prices have drifted away from the spot prices of their respective commodities.

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Re: Gold ETFs (IAU, GLD, SGOL) in a taxable account.....dividends and capital gains?

Post by MP123 » Fri Jun 01, 2018 12:12 pm

crumbgrabber wrote:
Fri Jun 01, 2018 11:04 am
These aren't dividends, they are sales to cover expenses. I use Fidelity and both IAU and GLD demonstrate this behavior. Perhaps I see these because I don't reinvest dividends automatically? I don't really know...for the amounts I own these are very small dollar amounts annually (~$5 total) so I haven't deemed it worthwhile to really investigate with Fidelity. Yet here I am discussing it on a forum!

If you don't see these expenses in your own brokerage, where do the expenses come from? These ETFs are not free to own! This is the reason these ETFs' share prices have drifted away from the spot prices of their respective commodities.
Well, it's a bit of a mystery then. I've never seen them from Schwab. You're right the trust sells gold to pay it's expenses both of which are allocated to the shareholders. It would seem like perhaps the sales and expenses would wash out.

These transactions and their related capital gains are reported on 1099-B to you (and the IRS) at Fidelity? Or is it just informational?

I agree that 72 de minimis capital gains transactions every year might get annoying to deal with.

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Re: Gold ETFs (IAU, GLD, SGOL) in a taxable account.....dividends and capital gains?

Post by halfnine » Fri Jun 01, 2018 3:02 pm

ualdriver wrote:
Fri Jun 01, 2018 4:40 am
If one holds a gold ETF like IAU, GLD, or SGOL in a taxable account, I assume that these ETFs will not throw off capital gains or dividends that will be reported on a 1099 every year? The only taxable event will be upon the sale of the shares, correct? (unfortunately likely at the unfavorable "collectible" tax rate?)

Thanks
Of course, to avoid unfavorable tax rates, when possible you can offset you capital gains in gold against your capital losses in equities.

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Re: Gold ETFs (IAU, GLD, SGOL) in a taxable account.....dividends and capital gains?

Post by crumbgrabber » Fri Jun 01, 2018 4:17 pm

MP123 wrote:
Fri Jun 01, 2018 12:12 pm

These transactions and their related capital gains are reported on 1099-B to you (and the IRS) at Fidelity? Or is it just informational?
These are on my 1099-B and are reported. I used Turbotax to download them--can't imagine typing everything in myself...

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Re: Gold ETFs (IAU, GLD, SGOL) in a taxable account.....dividends and capital gains?

Post by ualdriver » Fri Jun 01, 2018 5:27 pm

Hmmm....So one person is getting a 1099B and one isn’t? Is one ETF in a taxable account for one person and in a tax deferred account for another? I thought these types of ETFs were supposed to be relatively tax efficient (other than the unfavorable collectibles tax rate) when held in a taxable account?

****Also I’m well aware of how polarizing gold is on this forum. I wasn’t intending for this thread to discuss the merits of owning gold.

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Re: Gold ETFs (IAU, GLD, SGOL) in a taxable account.....dividends and capital gains?

Post by MP123 » Fri Jun 01, 2018 6:29 pm

ualdriver wrote:
Fri Jun 01, 2018 5:27 pm
Hmmm....So one person is getting a 1099B and one isn’t?
Yes, that seems to be the case here. And good idea to steer clear of the merits of owning gold as you point out.

My IAU is in taxable and has been since '05 so I suppose this might be a covered/uncovered share issue but it seems strange that Schwab doesn't report the monthly micro-sales to pay the grantor trust's expenses while Fidelity does. We're talking about a few dollars of CG a year so even at the maximum 28% rate it's still very small, possibly a rounding error. So it's tax efficient in that sense but frankly if I had to deal with accounting for the many little sales described above I probably would have sold a long time ago.

There must be others that hold some IAU or GLD, I wonder what their 1099-B forms look like?

Perhaps someone can educate us on reporting requirements for taxation on Widely Held Fixed Investment Trusts like IAU?

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Re: Gold ETFs (IAU, GLD, SGOL) in a taxable account.....dividends and capital gains?

Post by stlutz » Fri Jun 01, 2018 7:14 pm

http://www.spdrgoldshares.com/media/GLD ... n-2017.pdf
Because the Trust sold only a de minimis amount of gold for payment of Trust expenses during the year
and made no distributions of sale proceeds to its Shareholders, under Treas. Reg. Sec. 1.671-
5(c)(2)(iv)(B) neither the Trust nor brokers are required to report the gross proceeds of Trust sales to
Shareholders on Form 1099B. Certain brokers may nevertheless elect to report these proceeds to their
customers on a composite Form 1099B. For those Shareholders who have not received this information
on Form 1099B, it is contained in the attached 2017 Gross Proceeds File together with an example
illustrating how a Shareholder should calculate gain or loss.
So, it sounds like you owe the taxes but the fund/your broker don't have to report this information to you to calculate them.

iShares tax documents are on this page: https://www.ishares.com/us/library/tax

era00100
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Re: Gold ETFs (IAU, GLD, SGOL) in a taxable account.....dividends and capital gains?

Post by era00100 » Mon Feb 18, 2019 12:53 am

People have spoke about Fidelity / Schwab reporting this on the 1099 - does anyone here have experience with how Vanguard handles this? (I.e., will the micro sales appear on a 1099 from Vanguard).

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Re: Gold ETFs (IAU, GLD, SGOL) in a taxable account.....dividends and capital gains?

Post by ualdriver » Wed Feb 20, 2019 1:13 am

era00100 wrote:
Mon Feb 18, 2019 12:53 am
People have spoke about Fidelity / Schwab reporting this on the 1099 - does anyone here have experience with how Vanguard handles this? (I.e., will the micro sales appear on a 1099 from Vanguard).
I have my IAU ETF shares in a Vanguard brokerage account. I received a form, "2018 Non-Mortgage WHFIT Additional Information. It just shows monthly "investment expense proceeds" and that's it. I'm still trying to figure out how to handle those numbers and how they were derived.

Also still playing with the 2018 Grantor Trust Tax Reporting Statement found here:
https://www.ishares.com/us/library?prod ... 105~239561

madpunster
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Re: Gold ETFs (IAU, GLD, SGOL) in a taxable account.....dividends and capital gains?

Post by madpunster » Wed Feb 20, 2019 2:20 pm

I use costbasis.com to get the WHFIT info.

Here is a link to the GLD calculator:

http://www.costbasistools.com/gold/GLD.php

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Re: Gold ETFs (IAU, GLD, SGOL) in a taxable account.....dividends and capital gains?

Post by ralph124cf » Wed Feb 20, 2019 9:18 pm

ualdriver wrote:
Wed Feb 20, 2019 1:13 am
era00100 wrote:
Mon Feb 18, 2019 12:53 am
People have spoke about Fidelity / Schwab reporting this on the 1099 - does anyone here have experience with how Vanguard handles this? (I.e., will the micro sales appear on a 1099 from Vanguard).
I have my IAU ETF shares in a Vanguard brokerage account. I received a form, "2018 Non-Mortgage WHFIT Additional Information. It just shows monthly "investment expense proceeds" and that's it. I'm still trying to figure out how to handle those numbers and how they were derived.

Also still playing with the 2018 Grantor Trust Tax Reporting Statement found here:
https://www.ishares.com/us/library?prod ... 105~239561
Hi T38.

Joe P from the "other" forum here.

Consider investing in a gold mine share mutual fund instead of an ETF with actual gold ownership. The gold mine fund gives you leverage, but more important, a gold mine fund can pay dividends with a static gold price, since, you know, it actually mines gold. You won't make much money with a static gold price, but at least you won't lose as much as with a gold ownership ETF.

If you own GLD, you appear to be betting that gold will go up. Mutual funds such as USAGX and FSAGX give approximately 2-3 times leverage, up or down, on gold price movements. They are, of course, investments in stocks, so sometimes the shares can move in the opposite direction of gold for a few days, like today.

Note: The past five years results for both of these funds have been terrible.

Ralph

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Re: Gold ETFs (IAU, GLD, SGOL) in a taxable account.....dividends and capital gains?

Post by era00100 » Sun Feb 24, 2019 3:28 pm

ualdriver wrote:
Wed Feb 20, 2019 1:13 am
I have my IAU ETF shares in a Vanguard brokerage account. I received a form, "2018 Non-Mortgage WHFIT Additional Information. It just shows monthly "investment expense proceeds" and that's it. I'm still trying to figure out how to handle those numbers and how they were derived.
ualdriver - Do you use a tax service like TurboTax? If so, have you tried to upload your Vanguard brokerage into it to see if it automatically accounts for this? Also, do the expense proceeds seem excessive or do they generally make sense?

Thanks for the info,
Eric

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Re: Gold ETFs (IAU, GLD, SGOL) in a taxable account.....dividends and capital gains?

Post by DB2 » Sun Feb 24, 2019 3:52 pm

ralph124cf wrote:
Wed Feb 20, 2019 9:18 pm
ualdriver wrote:
Wed Feb 20, 2019 1:13 am
era00100 wrote:
Mon Feb 18, 2019 12:53 am
People have spoke about Fidelity / Schwab reporting this on the 1099 - does anyone here have experience with how Vanguard handles this? (I.e., will the micro sales appear on a 1099 from Vanguard).
I have my IAU ETF shares in a Vanguard brokerage account. I received a form, "2018 Non-Mortgage WHFIT Additional Information. It just shows monthly "investment expense proceeds" and that's it. I'm still trying to figure out how to handle those numbers and how they were derived.

Also still playing with the 2018 Grantor Trust Tax Reporting Statement found here:
https://www.ishares.com/us/library?prod ... 105~239561
Hi T38.

Joe P from the "other" forum here.

Consider investing in a gold mine share mutual fund instead of an ETF with actual gold ownership. The gold mine fund gives you leverage, but more important, a gold mine fund can pay dividends with a static gold price, since, you know, it actually mines gold. You won't make much money with a static gold price, but at least you won't lose as much as with a gold ownership ETF.

If you own GLD, you appear to be betting that gold will go up. Mutual funds such as USAGX and FSAGX give approximately 2-3 times leverage, up or down, on gold price movements. They are, of course, investments in stocks, so sometimes the shares can move in the opposite direction of gold for a few days, like today.

Note: The past five years results for both of these funds have been terrible.

Ralph
JNUG has done incredibly well lately.

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Re: Gold ETFs (IAU, GLD, SGOL) in a taxable account.....dividends and capital gains?

Post by era00100 » Sun Feb 24, 2019 5:00 pm

ualdriver wrote:
Wed Feb 20, 2019 1:13 am
I have my IAU ETF shares in a Vanguard brokerage account. I received a form, "2018 Non-Mortgage WHFIT Additional Information. It just shows monthly "investment expense proceeds" and that's it. I'm still trying to figure out how to handle those numbers and how they were derived.

Also still playing with the 2018 Grantor Trust Tax Reporting Statement found here:
https://www.ishares.com/us/library?prod ... 105~239561
One additional follow up - have you checked your 2018 1099 to see if IAU is mentioned there?

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Re: Gold ETFs (IAU, GLD, SGOL) in a taxable account.....dividends and capital gains?

Post by ualdriver » Sun Feb 24, 2019 9:54 pm

era00100 wrote:
Sun Feb 24, 2019 3:28 pm
ualdriver wrote:
Wed Feb 20, 2019 1:13 am
I have my IAU ETF shares in a Vanguard brokerage account. I received a form, "2018 Non-Mortgage WHFIT Additional Information. It just shows monthly "investment expense proceeds" and that's it. I'm still trying to figure out how to handle those numbers and how they were derived.
ualdriver - Do you use a tax service like TurboTax? If so, have you tried to upload your Vanguard brokerage into it to see if it automatically accounts for this? Also, do the expense proceeds seem excessive or do they generally make sense?

Thanks for the info,
Eric
The expenses are about .136% (i.e. value of my IAU holdings / amount of expenses on that form = .001356). Anything greater than zero would seem excessive to me as I don't have what appear to be "extra" expenses broken out for my other index fund holdings.

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Re: Gold ETFs (IAU, GLD, SGOL) in a taxable account.....dividends and capital gains?

Post by ualdriver » Sun Feb 24, 2019 9:55 pm

era00100 wrote:
Sun Feb 24, 2019 5:00 pm
ualdriver wrote:
Wed Feb 20, 2019 1:13 am
I have my IAU ETF shares in a Vanguard brokerage account. I received a form, "2018 Non-Mortgage WHFIT Additional Information. It just shows monthly "investment expense proceeds" and that's it. I'm still trying to figure out how to handle those numbers and how they were derived.

Also still playing with the 2018 Grantor Trust Tax Reporting Statement found here:
https://www.ishares.com/us/library?prod ... 105~239561
One additional follow up - have you checked your 2018 1099 to see if IAU is mentioned there?
IAU not mentioned on my Vanguard 1099.

era00100
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Re: Gold ETFs (IAU, GLD, SGOL) in a taxable account.....dividends and capital gains?

Post by era00100 » Sun Feb 24, 2019 11:20 pm

Interesting.

These threads also provide some insight:

viewtopic.php?t=62794
viewtopic.php?p=925873#925873

If you find out a definite answer on this I would be curious to know it.

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Re: Gold ETFs (IAU, GLD, SGOL) in a taxable account.....dividends and capital gains?

Post by ualdriver » Mon Feb 25, 2019 7:27 am

era00100 wrote:
Sun Feb 24, 2019 11:20 pm
Interesting.

These threads also provide some insight:

viewtopic.php?t=62794
viewtopic.php?p=925873#925873

If you find out a definite answer on this I would be curious to know it.
I'll post back if I do. I have one tax geek forum to hit when I get a spare moment. I'll take a look at those threads tonight.

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ualdriver
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Re: Gold ETFs (IAU, GLD, SGOL) in a taxable account.....dividends and capital gains?

Post by ualdriver » Mon Mar 04, 2019 11:00 pm

era00100 wrote:
Sun Feb 24, 2019 11:20 pm
Interesting.

These threads also provide some insight:

viewtopic.php?t=62794
viewtopic.php?p=925873#925873

If you find out a definite answer on this I would be curious to know it.
I own IAU at both Vanguard and Fidelity in brokerage accounts. They were purchased at the same time and are in roughly equal amounts. Fidelity sent me a 1099-B concerning IAU transactions. Vanguard has not.

era00100
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Re: Gold ETFs (IAU, GLD, SGOL) in a taxable account.....dividends and capital gains?

Post by era00100 » Tue Mar 05, 2019 8:51 am

Thx for the info.

In the Fidelity account, do the IAU transactions on the 1099 fall into place with all other taxable events? In other words, can you essentially just drop what fidelity gave you into a program like turbo tax and it handles them?

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Re: Gold ETFs (IAU, GLD, SGOL) in a taxable account.....dividends and capital gains?

Post by ualdriver » Tue Mar 05, 2019 10:15 am

era00100 wrote:
Tue Mar 05, 2019 8:51 am
Thx for the info.

In the Fidelity account, do the IAU transactions on the 1099 fall into place with all other taxable events? In other words, can you essentially just drop what fidelity gave you into a program like turbo tax and it handles them?
I use H&R Block TaxCut software, and it downloaded the transactions so I didn't have to type them in. I'm sure TurboTax is the same.

era00100
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Re: Gold ETFs (IAU, GLD, SGOL) in a taxable account.....dividends and capital gains?

Post by era00100 » Tue Mar 05, 2019 10:17 am

Ya, OK. Did the IAU items have a decent sized impact? Do they just appear as “Capital Gains”?

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Re: Gold ETFs (IAU, GLD, SGOL) in a taxable account.....dividends and capital gains?

Post by ualdriver » Tue Mar 05, 2019 10:33 am

era00100 wrote:
Tue Mar 05, 2019 10:17 am
Ya, OK. Did the IAU items have a decent sized impact? Do they just appear as “Capital Gains”?
The difference between the basis and the proceeds of the sale was like 3 bucks :happy

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Re: Gold ETFs (IAU, GLD, SGOL) in a taxable account.....dividends and capital gains?

Post by era00100 » Tue Mar 05, 2019 10:38 am

Lol :) Did the 3 bucks get automatically added to your total short term capital gains?

Thx again for the info.

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Re: Gold ETFs (IAU, GLD, SGOL) in a taxable account.....dividends and capital gains?

Post by Tyler9000 » Tue Mar 05, 2019 10:38 am

era00100 wrote:
Tue Mar 05, 2019 8:51 am
In the Fidelity account, do the IAU transactions on the 1099 fall into place with all other taxable events? In other words, can you essentially just drop what fidelity gave you into a program like turbo tax and it handles them?
I did that just yesterday with Turbotax importing IAU transaction data from Fidelity. It's extremely easy, as Turbotax takes care of everything. Individual transactions are classified as short or long term depending on how long you've held the lot.

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