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

Posted: Mon Jan 18, 2016 8:13 am
by LazyInvestor
It seems we won't have time to trade as the day of conversion is Jan 19. Today is some holiday so markets are closed.

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

Posted: Tue Jan 19, 2016 10:29 am
by Libertarian666
I was able to sell my converted shares but I had to call Fidelity to do it.

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

Posted: Tue Jan 19, 2016 12:03 pm
by dragoncar
I'm waiting until my annual contribution/rebalancing time next month.  Is there an urgent need to get out of phys?  Seems my taxes next April are screwed either way!

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

Posted: Tue Jan 19, 2016 12:14 pm
by Libertarian666
dragoncar wrote: I'm waiting until my annual contribution/rebalancing time next month.  Is there an urgent need to get out of phys?  Seems my taxes next April are screwed either way!
The need is that I hate Sprott's behavior in this situation and don't want to do business with them in any way, ever.

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

Posted: Tue Jan 19, 2016 12:42 pm
by al14
Hello!
I was a GTU holder until PHYS took over a few days ago. Given that I always elect QEF option on my US tax form I do not find PHYS any different from GTU since the annual PFIC statements show no distributions since the inception in 2010. I'm a little confused by this, since the redemptions should cause adverse 28% collectible tax rate on US unit holders in Sprott PHYS, but there is no evidence as far as annual PFIC statements show. Is there another tax document that exposes US unit holders to 28% collectible tax rate, or is there something I don't understand?

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

Posted: Tue Jan 19, 2016 3:09 pm
by Reub
I guess that this is my first day owning PHYS and I noticed that it closed down 0.34% vs. down 0.10% for GLD and IAU. Why is this?

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

Posted: Tue Jan 19, 2016 3:23 pm
by dragoncar
al14 wrote: Hello!
I was a GTU holder until PHYS took over a few days ago. Given that I always elect QEF option on my US tax form I do not find PHYS any different from GTU since the annual PFIC statements show no distributions since the inception in 2010. I'm a little confused by this, since the redemptions should cause adverse 28% collectible tax rate on US unit holders in Sprott PHYS, but there is no evidence as far as annual PFIC statements show. Is there another tax document that exposes US unit holders to 28% collectible tax rate, or is there something I don't understand?
Good question, and I'd like to know also.  I tried to find out what makes a gold holding collectible and it seems like closed-end funds are not whereas ETFs are?  I did search in the gold sub-forums but I couldn't find a recent summary of non-physical gold options.

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

Posted: Wed Jan 20, 2016 8:51 am
by LazyInvestor
Good you managed to sell. I still only see GTU at IB. I guess it'll take few days for them to convert the shares.

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

Posted: Wed Jan 20, 2016 10:24 am
by Reub
With the price of gold moving higher recently I hope that PHYS doesn't find a way to screw us on the conversion by not including us in these recent gains.

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

Posted: Wed Jan 20, 2016 10:38 am
by Dmilligan
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?

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

Posted: Wed Jan 20, 2016 12:28 pm
by pugchief
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?
I was holding some GTU at TDAmeritrade, and it was already showing as PHYS yesterday morning.

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

Posted: Wed Jan 20, 2016 12:34 pm
by al14
..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)

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

Posted: Wed Jan 20, 2016 1:37 pm
by steve
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. 

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

Posted: Wed Jan 20, 2016 2:36 pm
by dragoncar
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

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

Posted: Wed Jan 20, 2016 3:10 pm
by al14
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.

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

Posted: Wed Jan 20, 2016 3:11 pm
by Dmilligan
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.

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

Posted: Wed Jan 20, 2016 4:57 pm
by al14
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? 

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

Posted: Wed Jan 20, 2016 6:12 pm
by steve
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.

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

Posted: Wed Jan 20, 2016 9:05 pm
by Libertarian666
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.

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

Posted: Wed Jan 20, 2016 9:07 pm
by Libertarian666
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.

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

Posted: Wed Jan 20, 2016 9:09 pm
by Desert
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. 

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

Posted: Wed Jan 20, 2016 9:13 pm
by Libertarian666
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

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

Posted: Wed Jan 20, 2016 9:19 pm
by Desert
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.  ;)

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

Posted: Thu Jan 21, 2016 4:57 am
by LazyInvestor
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.

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

Posted: Thu Jan 21, 2016 1:14 pm
by dragoncar
Did anyone have to pay some brokerage fees for the conversion?  Is your cost basis adjusted correctly?  I haven't checked mine yet