Texas is one of many states that do not tax the sale of gold, silver or platinum numismatic coins or ingots. This is the case not only for gold coins and ingots, but also for most ETFs (exchange-traded funds), which are subject to taxes of 28%. Many investors, including financial advisors, have trouble owning these investments. They assume, incorrectly, that since gold ETFs are traded as stocks, they will also be taxed as stocks, which are subject to a long-term capital gains rate of 15 or 20%.
For those looking for the best self directed IRA for gold, it is important to understand the tax implications of investing in gold and other precious metals. Investors often perceive the high costs of owning gold as profit margins and storage fees for physical gold, or management fees and trading costs of gold funds. In reality, taxes can represent a significant cost of owning gold and other precious metals. Fortunately, there is a relatively easy way to minimize the tax implications of owning gold and other precious metals. For individual investors, Sprott Physical Bullion Trusts may offer more favorable tax treatment than comparable ETFs.
Because trusts are based in Canada and are classified as passive foreign investment companies (PFIC), U.S. non-corporate investors are entitled to standard long-term capital gains rates for the sale or reimbursement of their units. Again, these rates are 15% or 20%, depending on revenue, for units held for more than one year at the time of sale. While no investor likes to fill out additional tax forms, the tax savings of holding gold through one of the Sprott Physical Bullion Trusts and participating in the annual elections can be worthwhile.
To learn more about Sprott Physical Bullion Trusts, ask your financial advisor or Sprott representative for more information. Royal Bank Plaza, South Tower 200 Bay Street Suite 2600 Toronto, Ontario M5J 2J1 Canada. While initially gold was not allowed in IRAs, the most common forms of investment in gold, with the exception of the Krugerrands (South African gold coins), can be purchased within an IRA. The typical approach to investing in gold futures contracts is by purchasing gold futures ETFs or ETNs.
Gold exchange-traded funds (ETFs) offer an alternative to buying gold bars and are traded like stocks. While it seems that the idea that purchases of gold, silver and other precious metals are considered an investment and are therefore not subject to sales tax may be gaining ground, in fact, many states continue to levy sales taxes on precious metals. The prospectus contains important information about trusts, including investment objectives and strategies, purchasing options, applicable management fees, and expenses. So, if you have any precious metal on your property (or in a warehouse), the capital gains tax doesn't apply yet.