IAU Taxes w/Fidelity and TurboTax

Discussion of the Gold portion of the Permanent Portfolio

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vnatale
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Re: IAU Taxes w/Fidelity and TurboTax

Post by vnatale » Mon Nov 11, 2019 11:49 am

MangoMan wrote:
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.
I buy the H&R Block Deluxe + Efile + State. Depending upon when I buy it I think I pay in $30 to $40 range. If I buy it as soon as it is available (late November / December) I'm paying on the higher end. That is usually what I do to assist me in my tax planning for the year.

And, it seems like TurboTax does charge WAY more for the equivalent product.

I did use TurboTax this year for the first time in over 20 years when I was assisting someone who uses it. I thought it'd be a superior product to the H&R Block software but, maybe, because I was unfamiliar with it (while now quite familiar with H&R Block) I found it more difficult to determine how to enter things. It got quite frustrating at some points as I knew exactly where I wanted entries in the actual forms but it was not so easy to get them to appear there.

Vinny
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Re: IAU Taxes w/Fidelity and TurboTax

Post by vnatale » Mon Nov 11, 2019 1:31 pm

MangoMan wrote:
Mon Nov 11, 2019 12:06 pm
Tyler wrote:
Mon Nov 11, 2019 11:13 am
I download TurboTax for free every year through Fidelity. I think you have to have a minimum account balance to qualify, and even then they don't make the link easy to find. But it's worth looking for if you happen to invest with them.
1. That is the software download rather than the online version?
2. Does that include free e-file? If so, for how many returns?
Thanks
Does anyone here subscribe to what I once read that it makes it less likely of an audit if one files in paper because there is the added step of the IRS now having to hand key entry your information into their system?

Vinny
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: IAU Taxes w/Fidelity and TurboTax

Post by Tyler » Mon Nov 11, 2019 1:56 pm

MangoMan wrote:
Mon Nov 11, 2019 12:06 pm
1. That is the software download rather than the online version?
2. Does that include free e-file? If so, for how many returns?
Thanks
You can do either, but I always get the download. It also includes free e-file + one free state.
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Re: IAU Taxes w/Fidelity and TurboTax

Post by InsuranceGuy » Mon Nov 11, 2019 10:12 pm

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Last edited by InsuranceGuy on Mon Mar 08, 2021 5:58 pm, edited 1 time in total.
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Re: IAU Taxes w/Fidelity and TurboTax

Post by sophie » Tue Nov 12, 2019 8:16 am

Yes please!

I've gotten Turbotax through Fidelity, but only at a small discount, definitely not free. Will consider H&R block - thanks vnatale!

Oddly, New York State actually makes using the IRS online free forms impossible. There is a state online equivalent, but you can only use it if your income is below a certain (low) limit. Beyond that, they mandate that you efile through a commercial vendor. Geez! Did Turbotax bribe the governor or something?

Has anyone tried CreditKarma's free tax filing?
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Re: IAU Taxes w/Fidelity and TurboTax

Post by mathjak107 » Tue Nov 12, 2019 12:51 pm

sophie wrote:
Tue Nov 12, 2019 8:16 am
Yes please!

I've gotten Turbotax through Fidelity, but only at a small discount, definitely not free. Will consider H&R block - thanks vnatale!

Oddly, New York State actually makes using the IRS online free forms impossible. There is a state online equivalent, but you can only use it if your income is below a certain (low) limit. Beyond that, they mandate that you efile through a commercial vendor. Geez! Did Turbotax bribe the governor or something?

Has anyone tried CreditKarma's free tax filing?
We get it free from fidelity including the state as a perk for having fidelity private access status
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Re: IAU Taxes w/Fidelity and TurboTax

Post by Tyler » Tue Jan 07, 2020 12:04 pm

MangoMan wrote:
Tue Nov 12, 2019 7:34 am
If anyone here sees a link to the deal, please post it. Thanks
FYI -- the free Turbotax Premier link finally showed up on my Fidelity summary page this week. You can use it to acquire either the online or download versions. Fidelity is notoriously vague about how they determine who qualifies so you may not see the same option I do, but if you have a Fidelity account it's worth checking.
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Re: IAU Taxes w/Fidelity and TurboTax

Post by era » Tue Jan 07, 2020 9:56 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.
I had a quick follow up question regarding this - how are the small transactions reported? Are they little capital gains (i.e. on the 1099)? If so, if the price of gold goes up and down throughout the year, do some of the gains/losses cancel each other out?

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

Post by Tyler » Tue Jan 07, 2020 10:06 pm

era wrote:
Tue Jan 07, 2020 9:56 pm

I had a quick follow up question regarding this - how are the small transactions reported? Are they little capital gains (i.e. on the 1099)? If so, if the price of gold goes up and down throughout the year, do some of the gains/losses cancel each other out?
Yes, that's exactly how it works. Basically, each lot sells off a small fractional amount every month and the proceeds are tracked against the cost basis. In 2018 I had a bunch of gains/losses for pennies each that added up to a net long term loss of a few dollars. It would be a real pain if I had to enter all of that manually, but Turbotax imported it all automatically and it was not a big deal.
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Re: IAU Taxes w/Fidelity and TurboTax

Post by era » Thu Jan 09, 2020 12:13 pm

Tyler wrote:
Tue Jan 07, 2020 10:06 pm
era wrote:
Tue Jan 07, 2020 9:56 pm

I had a quick follow up question regarding this - how are the small transactions reported? Are they little capital gains (i.e. on the 1099)? If so, if the price of gold goes up and down throughout the year, do some of the gains/losses cancel each other out?
Yes, that's exactly how it works. Basically, each lot sells off a small fractional amount every month and the proceeds are tracked against the cost basis. In 2018 I had a bunch of gains/losses for pennies each that added up to a net long term loss of a few dollars. It would be a real pain if I had to enter all of that manually, but Turbotax imported it all automatically and it was not a big deal.
OK, thank you, this is very helpful. I have a couple other questions if thats okay.

Are the individual sales tracked throughout the year somewhere on your Fidelity account? In other words, for example in my Vanguard account, I can go to the tax center any time through the year and look at my "realized capital gains" for the given year. Or do they just come out at the end of the year? If so, are the transactions obvious what they are somewhere in the Fidelity dashboard - or is it not until they get uploaded to TurboTax that they are obvious?

Thanks for the help again.- I am debating opening up a brokerage account with Fidelity just for purpose of taking a position in gold via IAU, I currently use Vanguard for equities via VTSAX.
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Re: IAU Taxes w/Fidelity and TurboTax

Post by era » Thu Jan 09, 2020 3:05 pm

MangoMan wrote:
Thu Jan 09, 2020 12:16 pm
I am a fan of Fidelity, but why can't you just buy IAU in your Vanguard account? There is now no commissions there either.
I would definitely prefer that - but based on this thread:
https://www.bogleheads.org/forum/viewto ... 0&t=250680

It does not appear that Vanguard handles gold ETF expense transactions properly.
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Re: IAU Taxes w/Fidelity and TurboTax

Post by Tyler » Thu Jan 09, 2020 4:25 pm

era wrote:
Thu Jan 09, 2020 12:13 pm
Are the individual sales tracked throughout the year somewhere on your Fidelity account? In other words, for example in my Vanguard account, I can go to the tax center any time through the year and look at my "realized capital gains" for the given year. Or do they just come out at the end of the year? If so, are the transactions obvious what they are somewhere in the Fidelity dashboard - or is it not until they get uploaded to TurboTax that they are obvious?
I don't see them in my tax info right now, but I can absolutely see them in my archived final tax statements. Compiling all of that info actually takes a little time for Fidelity, so the final tax info is delayed every year until February or March. If you're the type that wants to do your taxes early, it might be a pain. But if you're patient it's no big deal.
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Re: IAU Taxes w/Fidelity and TurboTax

Post by era » Thu Jan 09, 2020 4:33 pm

::)
Tyler wrote:
Thu Jan 09, 2020 4:25 pm
era wrote:
Thu Jan 09, 2020 12:13 pm
Are the individual sales tracked throughout the year somewhere on your Fidelity account? In other words, for example in my Vanguard account, I can go to the tax center any time through the year and look at my "realized capital gains" for the given year. Or do they just come out at the end of the year? If so, are the transactions obvious what they are somewhere in the Fidelity dashboard - or is it not until they get uploaded to TurboTax that they are obvious?
I don't see them in my tax info right now, but I can absolutely see them in my archived final tax statements. Compiling all of that info actually takes a little time for Fidelity, so the final tax info is delayed every year until February or March. If you're the type that wants to do your taxes early, it might be a pain. But if you're patient it's no big deal.

Thank you for the quick and detailed response. Very helpful.
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Re: IAU Taxes w/Fidelity and TurboTax

Post by era » Thu Jan 09, 2020 8:20 pm

So you do not need to pay capital gains tax on the micro sale in the year they happen? Is that a special rule for these types of capital gains?
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Re: IAU Taxes w/Fidelity and TurboTax

Post by Xan » Thu Jan 09, 2020 8:36 pm

I'm with era, Pug, I'm not sure that makes sense.

I've held IAU in taxable with Ameritrade and have never received information about these microtransactions from them. This is the first I'm hearing that other brokers do it.

To be honest I've always figured it was de minimus and could be ignored. So that's how I've played it. Since I do my taxes manually (basically), if I were to switch brokerages and potentially end up with a million different taxable events, that would be a big pain.
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Re: IAU Taxes w/Fidelity and TurboTax

Post by era » Thu Jan 09, 2020 9:56 pm

"Consult with your tax advisor regarding proper treatment"

Tyler - For fidelity, do they assume "proper treatment" is capital gains taxed at the commodities rate? (Asking since it appears your account does the most things "automatically", probably because iShares and Fidelity have an arrangement together I believe.)

On the other hand it does say this in the link:
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.
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Re: IAU Taxes w/Fidelity and TurboTax

Post by Tyler » Thu Jan 09, 2020 10:49 pm

era wrote:
Thu Jan 09, 2020 9:56 pm
Tyler - For fidelity, do they assume "proper treatment" is capital gains taxed at the commodities rate? (Asking since it appears your account does the most things "automatically", probably because iShares and Fidelity have an arrangement together I believe.)
I haven't personally had a net taxable capital gain on gold in a while. But both Fidelity and Turbotax are very thorough so I have no reason to doubt their calculations.
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Re: IAU Taxes w/Fidelity and TurboTax

Post by era » Sat Jan 11, 2020 9:23 am

Tyler wrote:
Thu Jan 09, 2020 10:49 pm
era wrote:
Thu Jan 09, 2020 9:56 pm
Tyler - For fidelity, do they assume "proper treatment" is capital gains taxed at the commodities rate? (Asking since it appears your account does the most things "automatically", probably because iShares and Fidelity have an arrangement together I believe.)
I haven't personally had a net taxable capital gain on gold in a while. But both Fidelity and Turbotax are very thorough so I have no reason to doubt their calculations.
Tyler - does what they discussed in this thread match your experience? Specifically, form 8949:

https://ttlc.intuit.com/community/inves ... /00/276121
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Re: IAU Taxes w/Fidelity and TurboTax

Post by sophie » Sat Jan 11, 2020 9:53 am

Honestly, these kinds of tax headaches are exactly why I got rid of my taxable gold ETFs a long time ago in favor of physical or Perth Mint gold. However this thread raises an interesting question: any storage, insurance etc charges need to be tracked as it's part of your cost basis in the investment! Also, not sure exactly how to handle cost basis if I were to sell and withdraw from my Perth Mint account. I expect I'd have a lot of leeway since they obviously don't have to report anything to the US IRS.

If you do want to own taxable gold in ETF form, definitely go with a gold trust like PHYS. You have to file a form every year (whether you sell or not), but when you do end up selling you will pay capital gains rates and not collectibles rate. Last I checked, the form cannot be filed electronically, thus your federal and probably also state tax returns must be filed in paper form. I would never for a second consider a standard gold ETF like IAU in taxable - of course if you have that you may be stuck with it now...
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Re: IAU Taxes w/Fidelity and TurboTax

Post by era » Sat Jan 11, 2020 10:24 am

sophie wrote:
Sat Jan 11, 2020 9:53 am
Honestly, these kinds of tax headaches are exactly why I got rid of my taxable gold ETFs a long time ago in favor of physical or Perth Mint gold. However this thread raises an interesting question: any storage, insurance etc charges need to be tracked as it's part of your cost basis in the investment! Also, not sure exactly how to handle cost basis if I were to sell and withdraw from my Perth Mint account. I expect I'd have a lot of leeway since they obviously don't have to report anything to the US IRS.

If you do want to own taxable gold in ETF form, definitely go with a gold trust like PHYS. You have to file a form every year (whether you sell or not), but when you do end up selling you will pay capital gains rates and not collectibles rate. Last I checked, the form cannot be filed electronically, thus your federal and probably also state tax returns must be filed in paper form. I would never for a second consider a standard gold ETF like IAU in taxable - of course if you have that you may be stuck with it now...
Sophie,

I do not have it yet, I am currently considering all of the options. I am also looking looking at IAUF. https://www.ishares.com/us/products/293782/ It appears to be taxed the same as a regular equity ETF (still trying to figure it out). It is even more "paper" gold than IAU, which I understand carries its own risks. But, on the plus side, if it is taxed as a regular ETF, the capital gains would get the regular treatment and not the commodity rates.
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Re: IAU Taxes w/Fidelity and TurboTax

Post by Tyler » Sat Jan 11, 2020 5:03 pm

era wrote:
Sat Jan 11, 2020 9:23 am

Tyler - does what they discussed in this thread match your experience? Specifically, form 8949:

https://ttlc.intuit.com/community/inves ... /00/276121
Yes. Turbotax fills out form 8949 automatically.
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Re: IAU Taxes w/Fidelity and TurboTax

Post by vnatale » Sun Oct 17, 2021 8:49 am

era wrote:
Sat Jan 11, 2020 10:24 am

sophie wrote:
Sat Jan 11, 2020 9:53 am

Honestly, these kinds of tax headaches are exactly why I got rid of my taxable gold ETFs a long time ago in favor of physical or Perth Mint gold. However this thread raises an interesting question: any storage, insurance etc charges need to be tracked as it's part of your cost basis in the investment! Also, not sure exactly how to handle cost basis if I were to sell and withdraw from my Perth Mint account. I expect I'd have a lot of leeway since they obviously don't have to report anything to the US IRS.

If you do want to own taxable gold in ETF form, definitely go with a gold trust like PHYS. You have to file a form every year (whether you sell or not), but when you do end up selling you will pay capital gains rates and not collectibles rate. Last I checked, the form cannot be filed electronically, thus your federal and probably also state tax returns must be filed in paper form. I would never for a second consider a standard gold ETF like IAU in taxable - of course if you have that you may be stuck with it now...


Sophie,

I do not have it yet, I am currently considering all of the options. I am also looking looking at IAUF. https://www.ishares.com/us/products/293782/ It appears to be taxed the same as a regular equity ETF (still trying to figure it out). It is even more "paper" gold than IAU, which I understand carries its own risks. But, on the plus side, if it is taxed as a regular ETF, the capital gains would get the regular treatment and not the commodity rates.


Era,

Have you come to any conclusions regarding IAUF?

I believe that you might be the only person in this forum who have cited it as a possible Gold "paper" investment.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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