Sprott

Physical Gold Trust Tax Information

The Sprott Physical Bullion Trusts potentially provide favorable tax advantages versus owning metals directly or precious metals ETFs.

tax treatment if
held over 1 year
Sprott Physical Bullion Trusts*
15%** or 20%***
taxed at capital gains tax rate
Precious Metals:Coins, Bullion, ETFs
28%
taxed at collectibles tax rate
* Requires the timely filing of a QEF form for your tax return.
** 15% for single filers earning under $400,000.
*** 20% for married filers earning over $450,000 and single filers earning over $400, 000.

 

How are precious metals taxed? The IRS considers precious metals to be collectibles like art, rare books and fine wine. Provided you hold it for more than 1 year, the capital gains tax on your net gain from selling a collectible is 28%. This level of tax is considerably higher than the tax rate on most net capital gains, which is an average of 15% for most taxpayers, according to the IRS1. If you sell a collectible in less than one year, the proceeds will be taxed as ordinary income.

Special U.S. federal income tax rules apply to holders of the Sprott Physical Bullion Trusts because they are classified as Passive Foreign Investment Corporations (PFICs) by the IRS. If a U.S. non-corporate holder makes a timely QEF election each year by filing IRS form 8621 with his or her federal income tax return, it will generally mitigate the otherwise adverse U.S. federal income tax consequences of owning precious metals via coins, bullion or ETFs. Capital gains will be taxed at either 15% or 20% depending on the holder’s specific personal situation. 

Frequently Asked Questions

Macro alias: Accordion
1 The information provided is general in nature and is provided with the understanding that it may not be relied upon as, nor considered to be, the rendering or tax, legal, accounting or professional advice. Readers should consult with their own accountants and/or lawyers for advice on the specific circumstances before taking any action

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