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

Post by LazyInvestor » Wed Jan 20, 2016 8:51 am

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

Post by Reub » Wed Jan 20, 2016 10:24 am

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

Post by Dmilligan » Wed Jan 20, 2016 10:38 am

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

Post by pugchief » Wed Jan 20, 2016 12:28 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?
I was holding some GTU at TDAmeritrade, and it was already showing as PHYS yesterday morning.
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by al14 » Wed Jan 20, 2016 12:34 pm

..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)
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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

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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? 
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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.
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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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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. 
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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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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.  ;)
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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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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by dragoncar » Thu Jan 21, 2016 1:14 pm

Did anyone have to pay some brokerage fees for the conversion?  Is your cost basis adjusted correctly?  I haven't checked mine yet
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by LazyInvestor » Thu Jan 21, 2016 1:58 pm

No conversion fees. Partial share was sold to round down the number of shares (0.2 share in my case) and cash was deposited. Cost basis looks fine.
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by Reub » Thu Jan 21, 2016 2:00 pm

I'll bet that the ones that haven't converted yet are held in Vanguard. They are dreadfully slow.
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by dualstow » Thu Jan 21, 2016 7:50 pm

Showed up in Vanguard Jan 20. Well, I guess it showed up today (21st), but in transaction history, the Corp Action is 1/20.
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by LazyInvestor » Mon Feb 08, 2016 9:30 am

Just got rid of all my PHYS!
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by Reub » Mon Feb 08, 2016 9:50 am

Why? PHYS has been performing just as well as GLD, or IAU. Why get rid of it?
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by dragoncar » Wed Mar 02, 2016 3:23 pm

Picked up some CEF to tax loss harvest the PHYS.  At around 5% discount, I'm ready for a takeover now!  I know it isn't pure PP, but I'm only planning to hold for a month (although I'll see how I feel in a month).  Hopefully this is kosher with wash sale rules, as I suppose the gold component could be considered equivalent, but they are certainly very different securities given all the other differences in management, etc.
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by Libertarian666 » Wed Mar 02, 2016 6:54 pm

Reub wrote: Why? PHYS has been performing just as well as GLD, or IAU. Why get rid of it?
The reason I got rid of my GTU as soon as it was taken over by Sprott is that I don't want to do business with people who use such tactics as Sprott uses. Performance is secondary to that.
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