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jgordosea, Enrolled Agent
Category: Tax
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Experience:  I've prepared all types of taxes since 1987.
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Hi. I am looking for information on tax treatment for GLD (Gold

Customer Question

Hi. I am looking for information on tax treatment for GLD (Gold ETF). I purchased some GLD shares in 2008, and still hold those. The tax documentation for GLD is posted here - http://www.spdrgoldshares.com/sites/us/value/tax_info/. I need the specific details about the entries that need to be made for this stock on the 2009 tax forms. I did not include any information about this stock in my 2008 return.

Purchase Date : 5/28/2008
Quantity : 60
Purchase Price: 86.6699
Commission : 0
Total : 5,200.19
Submitted: 4 years ago.
Category: Tax
Expert:  Jacy replied 4 years ago.
Chat Conversation Started
Jacy :

Hello,

Jacy :

Did you sell any shares?

Jacy :

Hello again,

Jacy :

Thougth I'd try again with the chat.

Jacy :

So, if you did not sell any or your shares, there is no reporting requirements unless you receive a 1099 for interest or dividend income on your account. If you did sell some shares, it is reported on schedule D. Unfortunately, this type of asset is classified as the sale of collectibles, with a maximum tax rate of 28%

Jacy :

I hope this has been helpful to you.


If I have adequately answered your question,
please click the GREEN ACCEPT button so that I receive credit for my work.

If you need more information after clicking ACCEPT, please do not hesitate to click Reply and I will be happy to help you further. Thanks!


 

Customer :

Hello,

Customer :

Thanks for your response. Please see the page 11 of http://www.spdrgoldshares.com/media/GLD/file/SPDR-Gold-Trust-Tax-Information-2009.pdf.

Customer :


SPDR Gold Trust Gross Proceeds and Expense Files shows gold ounces acquired per


SPDR Gold Trust (GLD) share purchased, gold sold (in ounces), proceeds, and expenses



per SPDR Gold Trust (GLD ) Share. You can use this information to calculate your share


of GLD expenses, and your gain or loss on sale of gold to pay such expenses.



Example: Shareholder XYZ purchases 200 GLD shares on 1/30/2009 at a price of $91.31


per share for a total purchase price of $18,262. Shareholder XYZ had no other purchases


or sales of GLD shares during 2009 and held the shares for the remainder of 2009.


Customer :

On Page 12, it states that "Shareholders who purchased their shares prior to 2009, and made no otherDoesn't this mean that the adjusted cost basis needs to be calculated and reported for 2009? Or all calculations for the prior years need to be done only when the shares are sold? This was the source of my confusion, and hence my original question post.



purchases, should calculate their adjusted cost basis, using the gross proceeds information for the


relevant years, by following the same steps as in the example above."


Customer :

Thanks,

Customer :

Mahesh




Expert:  Jacy replied 4 years ago.

Hello,

 

It looks to me like you need to calculate the taxable gain on gold sold inside the trust to cover expenses, and adjust your basis accordingly. If you did not sell any shares, that is all you need to report.

 

As I do not have any experience with this, I'm going to opt out of this question so that another expert can assist you.

 

Thanks and Good Luck!

Expert:  jgordosea replied 4 years ago.

Greetings,

 

As mentioned in the tax information that you linked, you are an owner of the trust.

The income and expenses of the trust are reported by you, the individual.

 

The expenses listed for 2009 of about 36.5 cents per share (times the number of shares you held all year) is a deduction on Schedule A itemized deductions.

The deduction for most income-producing expenses is subject to a 2% limit that also applies to certain other miscellaneous itemized deductions. The amount deductible is limited to the total of these miscellaneous deductions that is more than 2% of your adjusted gross income.

See http://www.irs.gov/publications/p550/ch03.html#en_US_publink100010270 for more information.

 

There is not allowed any adjustment to your cost of the shares for the expenses.

 

Since 60 shares at 36.5 cents is only about $22 of expense deduction there is not likely any affect on your tax return unless you already have an amount of other miscellaneous itemized deductions more than 2% of your adjusted gross income.

 

So, no additional entry except perhaps adding the $22 to investment expenses is needed based on the information in the tax information that you linked.

 

Please ask if you need clarification.

 

 

Customer: replied 4 years ago.
Hello,
Thanks for your response. I need one clarification - based on the example shown on page 12 of the linked PDF, I need to include a gain/loss entry in Schedule D - part I. What would I need to enter there as cost basis, proceeds and gain/loss?
Thanks,
Mahesh
Expert:  jgordosea replied 4 years ago.

Hello again,

 

On page one it says: " Because the Trust sold only a de minimis amount of gold for payment of Trust expenses during the year and made no distributions of sale proceeds to its Shareholders, under Treas. Reg. Sec. 1.671- 5(c)(2)(iv)(B) the Trust is not required to report the gross proceeds of Trust sales to its Shareholders.

However, for those Shareholders who wish to have this information, it is contained in the attached 2009 Gross Proceeds File."

That is, there was such a very minimal amount of gold sold in 2009 so that there were not any sales proceeds being reported to you (and the other shareholders) for 2009. There is not any reporting of distribution from sales for 2009 from the trust for you to report.

There is not enough to matter to have to put anything on Schedule D is what it seems to say, (even without my seeing the figures from the 2009 Gross Proceeds File). You could confirm this my seeing that your 60 shares are a very very small fraction of the total shares outstanding and so also of the 2009 Gross Proceeds.

I hope this helps to clarify for you.



Edited by John Gordos EA on 10/3/2010 at 2:14 AM EST
jgordosea, Enrolled Agent
Category: Tax
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Experience: I've prepared all types of taxes since 1987.
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jgordosea
jgordosea
Enrolled Agent
2839 Satisfied Customers
I've prepared all types of taxes since 1987.