IAU Taxes w/Fidelity and TurboTax

Discussion of the Gold portion of the Permanent Portfolio

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era
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IAU Taxes w/Fidelity and TurboTax

Post by era » Sun Nov 10, 2019 2:35 pm

I have recently discovered the PP and am looking to transition to it. I have a couple questions regarding the gold allocation:

I think I am going to open up a taxable brokerage account with Fidelity and purchase the IAU ETF.

1) It looks like the fund expenses are gathered by selling off tiny portions of the fund. This I would assume would result in a taxable event. Does anyone here have experience with this? Specifically, does Fidelity provide this information, and can it be automatically imported into TurboTax?

2) The IAUF fund looks like a ticker that is meant to simplify this. It’s a derivative so I am unsure about it for the PP. The fund summary says its goal is to simplify the tax accounting by not requiring a K-1 form such as IAU does. Is this true? Does the IAU fund require a K-1 tax form?


Thank you for the help,
Eric
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Tyler
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Re: IAU Taxes w/Fidelity and TurboTax

Post by Tyler » Sun Nov 10, 2019 2:47 pm

I own IAU through Fidelity.

When you look at the annual summary, it indeed does report lots of small transactions. But Turbotax imports them all automatically so it's not a big deal.

I've never had to deal with a K-1 form, and according to this list physically backed funds like GLD and IAU don't have to issue them.
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era
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Re: IAU Taxes w/Fidelity and TurboTax

Post by era » Sun Nov 10, 2019 3:11 pm

Tyler wrote:
Sun Nov 10, 2019 2:47 pm
I own IAU through Fidelity.

When you look at the annual summary, it indeed does report lots of small transactions. But Turbotax imports them all automatically so it's not a big deal.

I've never had to deal with a K-1 form, and according to this list physically backed funds like GLD and IAU don't have to issue them.
Thanks for the reply. I also saw some info online that said IAU did not require a K-1, so I was slightly confused by the IAUF fund summary.

Have you gone through the process of selling IAU for a capital gain (or loss) through TurboTax? (I.e. does it “know” to apply the commodity tax?).
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Re: IAU Taxes w/Fidelity and TurboTax

Post by Tyler » Sun Nov 10, 2019 3:19 pm

I’ve definitely sold IAU, although I don’t remember specific times when I had a capital gain that wasn’t also offset by a capital loss elsewhere. But TurboTax is incredibly thorough, so my working assumption is that it’s all baked in.
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era
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Re: IAU Taxes w/Fidelity and TurboTax

Post by era » Sun Nov 10, 2019 3:41 pm

Tyler wrote:
Sun Nov 10, 2019 3:19 pm
I’ve definitely sold IAU, although I don’t remember specific times when I had a capital gain that wasn’t also offset by a capital loss elsewhere. But TurboTax is incredibly thorough, so my working assumption is that it’s all baked in.
This actually leads to one other question I have - I plan to hold VTSAX in a Vanguard brokerage. Do you happen to know if TurboTax will net out capital gains / losses across multiple brokerage accounts?

Thanks again.
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Re: IAU Taxes w/Fidelity and TurboTax

Post by Tyler » Sun Nov 10, 2019 3:49 pm

era wrote:
Sun Nov 10, 2019 3:41 pm
This actually leads to one other question I have - I plan to hold VTSAX in a Vanguard brokerage. Do you happen to know if TurboTax will net out capital gains / losses across multiple brokerage accounts?
I've never imported more than one brokerage account, but I do know that Turbotax allows that option. So I assume it would also calculate the taxes appropriately.
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Re: IAU Taxes w/Fidelity and TurboTax

Post by ochotona » Sun Nov 10, 2019 6:00 pm

OF COURSE I WOULD NEVER ADVOCATE TAX FRAUD, but if you replied on TurboTax to calculate the tax owned on a sale with a cap gain, and if it applied the regular cap gains tax, not the collectibles tax, well then I think you have a very interesting situation. ;)
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Re: IAU Taxes w/Fidelity and TurboTax

Post by vnatale » Mon Nov 11, 2019 9:27 am

ochotona wrote:
Sun Nov 10, 2019 6:00 pm
OF COURSE I WOULD NEVER ADVOCATE TAX FRAUD, but if you replied on TurboTax to calculate the tax owned on a sale with a cap gain, and if it applied the regular cap gains tax, not the collectibles tax, well then I think you have a very interesting situation. ;)
Sorry if I bring people on too many tangents. But, that said, does everyone here use TurboTax? Way back in the 90s I was using both their business and personal product and our business was spending $300 a year on those two products. But then, one of those years, Intuit got so money hungry that they severely restricted how much you could do on two computers with one copy of the personal product. It so enraged me that I dropped TurboTax entirely and have only used H&R Block since. I have, however, continued to use QuickBooks extensively and a lot of Quicken (although that has been sold by Intuit).

Finally, I run parallel Excel worksheets for all that is done in the tax software to make sure I understand and control every single result in the tax return. I go to the IRS web site to understand how every single issue is handled and document it in those worksheets with URLs and the exact words.

And, this year, I discovered someone who created the entire tax return based in Excel that was suitable for printing and filing (that is not at all the purpose of what I've created) which he makes available for free to all. I used that only to the extent of trying to divine how exactly the 20% business deduction was going to work. Since last year was its first year there was no clarity of how it was going to work prior to the actual 2018 tax forms coming out.

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Re: IAU Taxes w/Fidelity and TurboTax

Post by Xan » Mon Nov 11, 2019 9:35 am

I use and recommend Free File Fillable Forms. It's an electronic version of the paper forms. Does all the math for you. It's the official way to file online for free.
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Re: IAU Taxes w/Fidelity and TurboTax

Post by InsuranceGuy » Mon Nov 11, 2019 9:46 am

I have held IAU with FIdelity in the past and the small selloffs were in the annual summary and importable.

As far as free tax sites, https://www.freetaxusa.com/ is another good option. It even calculated what my state income tax should be so I can reverse engineer it on the state site.
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Re: IAU Taxes w/Fidelity and TurboTax

Post by vnatale » Mon Nov 11, 2019 10:00 am

InsuranceGuy wrote:
Mon Nov 11, 2019 9:46 am
I have held IAU with FIdelity in the past and the small selloffs were in the annual summary and importable.

As far as free tax sites, https://www.freetaxusa.com/ is another good option. It even calculated what my state income tax should be so I can reverse engineer it on the state site.
Thank you for this resource! I have never been aware of any online state tax resource.

Vinny
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Re: IAU Taxes w/Fidelity and TurboTax

Post by pugchief » Mon Nov 11, 2019 11:00 am

Xan wrote:
Mon Nov 11, 2019 9:35 am
I use and recommend Free File Fillable Forms. It's an electronic version of the paper forms. Does all the math for you. It's the official way to file online for free.
I also use H&R Block's tax software. I can usually find the deluxe version for $15-20 on sale. It's worth that much to me to import last year's returns, especially bc I do about 5 returns each year including friends and family.

Turbotax is a fine product, but way more expensive and with too many restrictions. I would need the business version from them because of some rental income, and that retails for close to $100. I can do what I need to at the deluxe level with HRB.
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