Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Discussion of the Gold portion of the Permanent Portfolio

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steve
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by steve » Wed Jan 20, 2016 1:37 pm

al14 wrote: ..and why would anyone want to sell their PHYS given that there is no difference whatsoever between it and GTU for tax or other purposes (besides redemption option, that is useless for most and doesn't affect US taxes)
I sold just because I do not want to have anything to do with Sprott because of  the takeover and the way it was done.  I made it work in my best interest taking advantage of a tax loss harvest.  I added to my core physical bullion and bought IAU and then also sold that for a tax loss harvest and now have GLD  As far as I know there is no wash sale rule for collectibles so that is also an advantage. 
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by dragoncar » Wed Jan 20, 2016 2:36 pm

steve wrote:
al14 wrote: ..and why would anyone want to sell their PHYS given that there is no difference whatsoever between it and GTU for tax or other purposes (besides redemption option, that is useless for most and doesn't affect US taxes)
I sold just because I do not want to have anything to do with Sprott because of  the takeover and the way it was done.  I made it work in my best interest taking advantage of a tax loss harvest.  I added to my core physical bullion and bought IAU and then also sold that for a tax loss harvest and now have GLD  As far as I know there is no wash sale rule for collectibles so that is also an advantage.
Leaning toward keeping it now... If tax effect is the same and fees are similar.  I was under the impression that the redemption option WOULD affect US taxes

I'm not gonna make financial decisions out of spite
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by al14 » Wed Jan 20, 2016 3:10 pm

Same here. As much as I detest what Sprott has done to Gold Trust I see no other option to maintain paper gold under favorable US capital gain taxation rules. My understanding is that shifting to GLD or IAU exposes to clearly spelled out 28% collectible tax rate, besides the ETF papers not being backed up by unencumbered metal in the vault.
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by Dmilligan » Wed Jan 20, 2016 3:11 pm

Dmilligan wrote: Anyone have any guess as to how long this conversion will take? What's the soonest I will be free to sell out of PHYS?
PHYS showed up in my Fidelity account today at market close. So, looks like the exchange has been effectuated.
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by al14 » Wed Jan 20, 2016 4:57 pm

No PHYS in my brokerage, neither GTU is there. Showing 100% loss of entire investment. Is that a drill for things to come? :)
I'm extremely puzzled by investor irrationality: if the offer from Polar was overwhelmingly rejected by GTU unit holders just a few months ago, why would the same people elect to convert to PHYS in a landslide a few days ago, while there is almost no difference between what Polar wanted and what PHYS is? 
steve
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by steve » Wed Jan 20, 2016 6:12 pm

al14 wrote: Same here. As much as I detest what Sprott has done to Gold Trust I see no other option to maintain paper gold under favorable US capital gain taxation rules. My understanding is that shifting to GLD or IAU exposes to clearly spelled out 28% collectible tax rate, besides the ETF papers not being backed up by unencumbered metal in the vault.
The 28% gain rate depends on the bracket your in "When you sell collectibles, the special 0%, 15%, and 20% tax rates on long-term capital gains don't apply. Instead, you'll owe tax at your ordinary tax rate, with a cap of 28%. As is the case with all assets, short-term capital gains on the sale of collectibles are taxed at ordinary rates"
I also won't miss filing the required forms every year ( f8621) to take advantage of favorable capital gains treatment which can also change.
In the mean time with my tax loss harvest strategy I offset paying any capital gains tax on my profits and have banked losses to offset possible future gains.  If you really want  gold and not paper buy bullion and put it in a vault that is under your control.
Libertarian666
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by Libertarian666 » Wed Jan 20, 2016 9:05 pm

al14 wrote: ..and why would anyone want to sell their PHYS given that there is no difference whatsoever between it and GTU for tax or other purposes (besides redemption option, that is useless for most and doesn't affect US taxes)
Because I don't want to deal with "people" like Sprott.
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by Libertarian666 » Wed Jan 20, 2016 9:07 pm

al14 wrote: Same here. As much as I detest what Sprott has done to Gold Trust I see no other option to maintain paper gold under favorable US capital gain taxation rules. My understanding is that shifting to GLD or IAU exposes to clearly spelled out 28% collectible tax rate, besides the ETF papers not being backed up by unencumbered metal in the vault.
Other than buying CEF, of course.

Downside: silver content.
Upside: large discount, which is likely to go away at some point in the future.

If I had a significant amount of new money to put to work, that's probably what I would do.
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Desert
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by Desert » Wed Jan 20, 2016 9:09 pm

What about physical gold?  I know I'm off topic, but I really think that when gold is needed most, we won't want to be looking at it on a screen, we'll want it in our possession. 
Our greatest fear should not be of failure, but of succeeding at something that doesn't really matter. 
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Diversification means always having to say you're sorry.
Libertarian666
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by Libertarian666 » Wed Jan 20, 2016 9:13 pm

Desert wrote: What about physical gold?  I know I'm off topic, but I really think that when gold is needed most, we won't want to be looking at it on a screen, we'll want it in our possession.
Sure, but you're right that it's off topic in this thread.  :P
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Desert
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by Desert » Wed Jan 20, 2016 9:19 pm

Libertarian666 wrote:
Desert wrote: What about physical gold?  I know I'm off topic, but I really think that when gold is needed most, we won't want to be looking at it on a screen, we'll want it in our possession.
Sure, but you're right that it's off topic in this thread.  :P
Ok, I'll go off and fondle my physical gold then.  ;)
Our greatest fear should not be of failure, but of succeeding at something that doesn't really matter. 
- D.L. Moody

Diversification means always having to say you're sorry.
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by LazyInvestor » Thu Jan 21, 2016 4:57 am

Mine converted fine too. I guess I have to also rationally check their prospectus and the trust rather than selling it just because I'm pissed off with the conversion.
Last edited by LazyInvestor on Thu Jan 21, 2016 1:51 pm, edited 1 time in total.
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