IAU Taxes w/Fidelity and TurboTax

Discussion of the Gold portion of the Permanent Portfolio

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era
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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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Xan
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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.
era
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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.
era
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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...
era
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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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