First, thank you for requesting me to assist you.
You are correct that the IRS treats gold, silver and other precious metals as "collectibles." However, they do not qualify for the 15% maximum tax rate onlong-term capital gains. Instead, gains on precious-metal ETFs that you've heldfor more than one year are taxed at your ordinary income rate, up to a maximumof 28%. If you hold the ETF for less than a year, gains will be taxed at incomerates up to 35%.
Please let me know if you require further information or clarification.
Thank you and best regards.
In this example, if I buy silver etf in beginning of the year at $2200. I receive $200 within year 2003 by selling covered calls on it which expire worthless. At end of year 2013, value of silver etf reduces to $1900 and I still own it. Will I have taxable income of $200 in year 2013. or will my taxable income be 0 or -$100 because
total value of security and premium received = $1900 + $200 = $2100 < $2200
I apologize for only addressing one part of your question.
Based on the information you have given me, you have a loss of $100.00.
Silver etf buying price in 2013 beginning = $2200
Premium received by selling covered calls = $200
Value of Silver etf at 2013 end = $1900.
As profit and loss of etf will be computed when it is sold. As silver etf is not sold at 2013 end but maintained. Will decrease of $300 be used in capital gain/loss calculation for tax purposes. or it will be only $200 gain in premium received.
If at end of 2013, one sells etf on 31st december 2013 for $1900 and buys it immediately to avoid any lapse, can one use it to show that there is no capital gain in year 2013