Are Gold ETFs taxed as "collectables"

[swmurray]

Hi:

Finally have opportunity/reason to step outside the company 401(k) with a rollover IRA.  No experience with ETFs, etc.  Unfortunately most money in the IRA is "pre-tax" so I cannot figure out how to do a backdoor Roth either  (different issue).

I don't want to pay the expense fees in PRPFX if I can avoid it, so I am studying how to set up a PP using ETFs or mutual funds in this rollover IRA.

I've read a few references that state that the IRS treats gold ETFs as "collectables" and either don't allow these in IRAs, or tax them at normal tax rates.  I also don't want to pay an accountant to do my taxes!

Can you readers clarify this issue for a newbie? 

I know about GLD and IAU, but any mutual funds to recommend (not mining stocks/funds though) that might avoid this issue?

I'll also be looking at coins for future "after-tax" investments.


Thanks!

[MediumTex]

Do your own due diligence, of course, but I believe that the IRS issued a private letter ruling a while back saying that GLD could be held in an IRA without gains being subject to the collectibles tax.  This PLR has been the basis for the general belief that gold ETFs held in an IRA are not subject to the collectibles tax and remain tax deferred until distribution, at which time they are taxed at ordinary income tax rates.

There is a LOT of discussion about this issue over at the bogleheads board.  You might check that out.

[swmurray]

I'll be darned.  I googled "tax rules for gold in ira".

Thanks!

http://www.smartmoney.com/taxes/estate/ ... 886856846/

swmurray