I need a name for this portfolio

A place to talk about speculative investing ideas for the optional Variable Portfolio

Moderator: Global Moderator

User avatar
ochotona
Executive Member
Executive Member
Posts: 2048
Joined: Fri Jan 30, 2015 5:54 am

Re: I need a name for this portfolio

Post by ochotona » Sun Mar 12, 2017 3:54 pm

bedraggled wrote:
Question: to avoid a collectibles tax on gold, while not buying an ETF, is IAU the place to put the gold portion? The postings on Sprott are effectively disuasive.

Thanks
You owe the collectibles tax on gold ETFs like IAU, GLD, and SGOL, just as if you held the metal itself. IAU is an ETF.
bedraggled
Executive Member
Executive Member
Posts: 517
Joined: Sat Sep 13, 2014 4:20 am

Re: I need a name for this portfolio

Post by bedraggled » Sun Mar 12, 2017 4:12 pm

Ocho,

Continued thanks.

So, how can an investor avoid the collectibles tax?

Cheers.
Jack Jones
Executive Member
Executive Member
Posts: 258
Joined: Mon Aug 24, 2015 3:12 pm

Re: I need a name for this portfolio

Post by Jack Jones » Sun Mar 12, 2017 4:33 pm

bedraggled wrote:Ocho,

Continued thanks.

So, how can an investor avoid the collectibles tax?

Cheers.
Buy gold with cash and don't tell anyone about it.
User avatar
Kriegsspiel
Executive Member
Executive Member
Posts: 1075
Joined: Sun Sep 16, 2012 5:28 pm

Re: I need a name for this portfolio

Post by Kriegsspiel » Sun Mar 12, 2017 5:41 pm

bedraggled wrote:Ocho,

Continued thanks.

So, how can an investor avoid the collectibles tax?

Cheers.
You would only pay the collectibles rate (28%) if your income tax bracket was 28% or above.

If your taxable income is less than 28%, you'd owe taxes on the gold's capital gains based on whatever your income tax bracket is. So 10%, 15%, or 25%.

To avoid it completely, you'd need to have no taxable income (staying under the standard deduction and personal exemption).
bedraggled
Executive Member
Executive Member
Posts: 517
Joined: Sat Sep 13, 2014 4:20 am

Re: I need a name for this portfolio

Post by bedraggled » Sun Mar 12, 2017 5:47 pm

Jack, Ocho, etc all,

Are there gold funds that avoid the collectibles tax? I believe PHYS is one but that will go to Sprott soon.

Yes, Jack, buying for cash may be the best idea.

SGOL is strongly touted. Should I just disregard the collectibles tax. More thoughts,please. (And I am having trouble spelling "collectible" or does it end "able"? I can't go to dictionary.com on this iPad).

Thanks.
User avatar
ochotona
Executive Member
Executive Member
Posts: 2048
Joined: Fri Jan 30, 2015 5:54 am

Re: I need a name for this portfolio

Post by ochotona » Sun Mar 12, 2017 7:59 pm

bedraggled wrote:Jack, Ocho, etc all,

Are there gold funds that avoid the collectibles tax? I believe PHYS is one but that will go to Sprott soon.

Yes, Jack, buying for cash may be the best idea.

SGOL is strongly touted. Should I just disregard the collectibles tax. More thoughts,please. (And I am having trouble spelling "collectible" or does it end "able"? I can't go to dictionary.com on this iPad).

Thanks.
You "disregard" Federal taxes at your own legal peril. Everyone makes their own decisions in life, but tax evasion I would never recommend.

Why is SGOL better than IAU or GLD? It's more expensive. Who is "touting" it to you? What's their agenda? Yes, it trades commission free at Schwab. That's nice.

When you backtest the three, IAU comes out best; it has the lowest expense ratio. I don't know anything about PHYS. Any ETF that holds gold bullion will have the same taxation issue.

You can avoid collectibles taxation if you buy gold miners, like the GDX ETF, but GDX is very volatile and sometimes doesn't act the same as gold. They are 85% correlated, not 100%. But you still have capital gains taxes, of course. And dividends are taxed. And you have to be a sly fox to trade GDX.
I have traded GDX and have never lost money on it, knock on wood, but it made me sweat.

Honestly, unless you want to study and work to optimize your taxes, just buy IAU and put it into your IRA, and forget about the stupid collectibles tax. You're going to get yourself into legal problems, and those will cost more than you can imagine. I got audited, and it cost me thousands to clear my name. I was right, but I was out thousands.
bedraggled
Executive Member
Executive Member
Posts: 517
Joined: Sat Sep 13, 2014 4:20 am

Re: I need a name for this portfolio

Post by bedraggled » Sun Mar 12, 2017 8:34 pm

Ocho,

Clarification: I meant to stop worrying about a collectibles tax and use pay if it is due.

Thanks.
User avatar
pugchief
Executive Member
Executive Member
Posts: 2357
Joined: Tue Jun 26, 2012 2:41 pm
Location: suburbs of Chicago, IL

Re: I need a name for this portfolio

Post by pugchief » Sun Mar 12, 2017 10:45 pm

bedraggled wrote:Ocho,

Continued thanks.

So, how can an investor avoid the collectibles tax?

Cheers.
PHYS [Sprott] is a PFIC just like GTU was. You can avoid the collectibles tax by filing form 8621 every year using the QEF election. Then, if you sell at a profit, you are taxed at your capital gains rate rather than the collectibles rate. If you are not in one of the upper marginal brackets, this is essentially moot, as Kriegsspiel noted above.
User avatar
dualstow
Executive Member
Executive Member
Posts: 7292
Joined: Wed Oct 27, 2010 10:18 am
Location: next to emotional support peacock
Contact:

Re: I need a name for this portfolio

Post by dualstow » Sat May 13, 2017 11:36 pm

In honor of the latest entry in portfoliocharts,"Cash is King":

heat map calculator:
20% domestic stock
10% long bonds
50% tbills
20% gold

Hmm, not bad.
The Latest Cryptocurrency Exchange Hack Is a $60 Million Theft at Japan's Zaif.
Post Reply