How much tax do I owe for sale of PRPFX

[guineapig]

Assuming I hold PRPFX for over 1 year in my taxable account, and sell all of them for a profit. Is it treated as a long term capital gain? will some of it be treated as collectibles and taxed at 28% since PRPFX has physical gold?

Will statement from PRPFX explain how much is long term, and collectible respectively?

Thanks

[MediumTex]

It would be all long term capital gain.

[guineapig]

It would be all long term capital gain.

Thanks, MT. Then I am right that in taxable account the prpfx has a huge tax advantage over most of the DIY version PP, and it may have advantage even over the IRA holdings because all IRA distribution will be taxed as regular income while prpfx is taxed as long term capital gain when you start liquidating them.

Did I miss anything?

[steve]

It would be all long term capital gain.

Thanks, MT. Then I am right that in taxable account the prpfx has a huge tax advantage over most of the DIY version PP, and it may have advantage even over the IRA holdings because all IRA distribution will be taxed as regular income while prpfx is taxed as long term capital gain when you start liquidating them.

Did I miss anything?

Just one quick thing you missed is:
A DIY version has the advantage of tax loss harvesting.

[BearBones]

Not to mention the benefits of holding assets more directly. Not a tax benefit, per se, but a benefit that should not be neglected. There could come a time in which "gold in the hand is worth two in the bush."

[guineapig]

Just one quick thing you missed is:
A DIY version has the advantage of tax loss harvesting.

If you hold it long enough, i think you probably have no loss to harvest at the end, right? even if you do, we are talking about the net gain from prpfx too.

During rebalancing your DIY version, the chance to have larger gain than loss is much higher, which is the point of PP, so i think prpfx still wins in this aspect.

[steve]

This is a recent example: I rebalanced my PP near the end of Jan. Not that long after TLT went down to the point where I had a nice loss but not anywhere near another rebalance point. I sold all the TLT that I had in my taxable account and with the proceeds bought a 50/50 split of EDV and VGLT. At this point in time the long term treasuries TLT,EDV and VGLT advanced and recovered  but I still have a nice loss to more then counter a previous gain from a sale. I try to sell at a loss anytime I have the opportunity and I have accumulated  large long term carry over losses to offset future gains. This is one reason  I like to do it myself.

[AdamA]

This is a recent example: I rebalanced my PP near the end of Jan. Not that long after TLT went down to the point where I had a nice loss but not anywhere near another rebalance point. I sold all the TLT that I had in my taxable account and with the proceeds bought a 50/50 split of EDV and VGLT. At this point in time the long term treasuries TLT,EDV and VGLT advanced and recovered  but I still have a nice loss to more then counter a previous gain from a sale. I try to sell at a loss anytime I have the opportunity and I have accumulated  large long term carry over losses to offset future gains. This is one reason  I like to do it myself.

Steve--

Do you mind clarifying the timeline a bit? 

So you bought TLT during a rebalance, and then, when it dropped, you were able to sell it (the shares purchased during the rebalance) and take a capital gains loss.  You then used the proceeds to buy EDV/VGLT, which eventually went up.

How long between the rebalance and the loss harvest?

Thanks for the info...this to me is one of the biggest advantages of DIY.

[steve]

I rebalanced the end of Jan 2011 on that date I increased my shares of TLT. Previous to that most of  my TLT holding in my taxable account consisted of shares bought around the middle of May 2010. Thinking back I remember TLT going up countering the drop in the stock market (VTI) then the stock market turned around and TLT dropped. I sold all TLT the beginning of Feb 2011 with a nice loss, at that point I bought EDV and VGLT and since then they recovered.  At the time I was thinking that in 31 days I would buy back TLT and to my surprise the long term bonds went up rather then down contrary to what most people were saying would happen. I do not know how this will play out maybe at some point if things change and the bonds fall back I will re buy TLT. Over the years I have accumulated carry over losses by doing this whenever I had a nice loss. The value of my portfolio has been going up and gains are off set by losses. I often think about some set tax loss rebalance band rule similar to the rebalance bands used, but at the present time I usually tax loss if I have about a $3000 loss. Not very scientific but so far working ok

[guineapig]

I rebalanced the end of Jan 2011 on that date I increased my shares of TLT. Previous to that most of  my TLT holding in my taxable account consisted of shares bought around the middle of May 2010. Thinking back I remember TLT going up countering the drop in the stock market (VTI) then the stock market turned around and TLT dropped. I sold all TLT the beginning of Feb 2011 with a nice loss, at that point I bought EDV and VGLT and since then they recovered.  At the time I was thinking that in 31 days I would buy back TLT and to my surprise the long term bonds went up rather then down contrary to what most people were saying would happen. I do not know how this will play out maybe at some point if things change and the bonds fall back I will re buy TLT. Over the years I have accumulated carry over losses by doing this whenever I had a nice loss. The value of my portfolio has been going up and gains are off set by losses. I often think about some set tax loss rebalance band rule similar to the rebalance bands used, but at the present time I usually tax loss if I have about a $3000 loss. Not very scientific but so far working ok

When do you expect to use your harvested loss? for rebalancing? or dividends?

How long can you carry these loss? will you lose these "harvested loss" if you don't use them in the same year?

[steve]

I will use these losses to off set future gains or $3000 a year untill they are used up. The carry over losses do not expire. With the PP usually something goes down when something goes up and opportunites to tax loss become available. I would also be looking if there was something to tax loss if I were getting close to a rebalance  point.

[SmallPotatoes]

I rebalanced the end of Jan 2011 on that date I increased my shares of TLT. Previous to that most of  my TLT holding in my taxable account consisted of shares bought around the middle of May 2010. Thinking back I remember TLT going up countering the drop in the stock market (VTI) then the stock market turned around and TLT dropped. I sold all TLT the beginning of Feb 2011 with a nice loss, at that point I bought EDV and VGLT and since then they recovered.  At the time I was thinking that in 31 days I would buy back TLT and to my surprise the long term bonds went up rather then down contrary to what most people were saying would happen. I do not know how this will play out maybe at some point if things change and the bonds fall back I will re buy TLT. Over the years I have accumulated carry over losses by doing this whenever I had a nice loss. The value of my portfolio has been going up and gains are off set by losses. I often think about some set tax loss rebalance band rule similar to the rebalance bands used, but at the present time I usually tax loss if I have about a $3000 loss. Not very scientific but so far working ok

When do you expect to use your harvested loss? for rebalancing? or dividends?

How long can you carry these loss? will you lose these "harvested loss" if you don't use them in the same year?

If I'm not mistaken the PP isn't really a loss harvesting vehicle. In fact it seems to be the opposite; sell the winner to buy the losers.

FWIW I enjoy PRPFX in my taxable space.  Never have to touch it.  Cash is in the bank and VG MM, LTT and Stocks in IRA with a smidgen of GTU for rebalancing. The rest in bullion.

Rebalancing is a snap. Each year make max IRA contribution and rebalance stocks and LTTs, buy bullion if necessary, and the rest goes in the savings acct.

If there wew a LTT & TSM mutual fund at roughly 50/50 I would just own that in my IRA and match my bullion & cash to it.