Gold tax location

[yankees60]

For those of you who own Gold in ETF form ... which of the following is your preferred tax location and why?

1) Taxable

2) Traditional IRA

3) Roth IRA

[ochotona]

For those of you who own Gold in ETF form ... which of the following is your preferred tax location and why?

2) Traditional IRA

Trad IRA could be a bad place... because remember, even with taxable accounts gold is treated as Ordinary Income except the marginal tax rate is capped at 28%. With a Trad IRA, there is no capping. It all depends on whether you think your marginal rate will exceed 28% when you finally sell it.

I think I could be above 28% at some point in the future when they have to raise tax rates because of debt & default problems, especially after my QLAC starts paying at age 82.

I have taxable gold which is to hold as long as possible, probably grant to my heirs. I have Roth gold and Roth miners, the plan is to trade out of these when the PM position gets too large. This is part of the HBPP that I plan on using, when PM gets to > 35% then sell the Roth positions.

[xmj]

For those of you who own Gold in ETF form ... which of the following is your preferred tax location and why?

1) Taxable

2) Traditional IRA

3) Roth IRA

"all of the above" as a diversifier

Living in a 0%CGT country does have its benefits

[Xan]

For those of you who own Gold in ETF form ... which of the following is your preferred tax location and why?

2) Traditional IRA

Trad IRA could be a bad place... because remember, even with taxable accounts gold is treated as Ordinary Income except the marginal tax rate is capped at 28%. With a Trad IRA, there is no capping. It all depends on whether you think your marginal rate will exceed 28% when you finally sell it.

I think I could be above 28% at some point in the future when they have to raise tax rates because of debt & default problems, especially after my QLAC starts paying at age 82.

I have taxable gold which is to hold as long as possible, probably grant to my heirs. I have Roth gold and Roth miners, the plan is to trade out of these when the PM position gets too large. This is part of the HBPP that I plan on using, when PM gets to > 35% then sell the Roth positions.

In taxable, gold is treated as a capital gain, with the max tax rate at 28% instead of being capped at the usual (IIRC) 20%. One huge benefit of a traditional (or Roth) IRA is that that there is no capital gains. Money taken out of a traditional IRA is considered to be earned at the time it is withdrawn; it doesn't matter whether it's from gold or not, and no cap gains are involved at all.

[ochotona]

Why would I want to subject money removed from an IRA to be taxed at an uncapped marginal rate when the simple act of making it "taxable gold" caps my marginal tax rate at 28%? Yes, you have to have a great income to get there, based on 2025 brackets, but I'm concerned about 2035 brackets.

Also, if inflation numbers are truly "cooked" then brackets won't index properly with actual inflation, so everyone in the country will experience bracket creep.

[Xan]

Why would I want to subject money removed from an IRA to be taxed at an uncapped marginal rate when the simple act of making it "taxable gold" caps my marginal tax rate at 28%? Yes, you have to have a great income to get there, based on 2025 brackets, but I'm concerned about 2035 brackets.

Also, if inflation numbers are truly "cooked" then brackets won't index properly with actual inflation, so everyone in the country will experience bracket creep.

Taxable gold: pay "uncapped marginal" taxes on the money it cost to buy the gold, then pay capital gains on any gains, up to 28%.
Taxable anything else: pay "uncapped marginal" taxes on the money it cost to buy the whatever, then pay capital gains on any gains, up to 20%.

In taxable, you're paying twice: once when you earn the money and then again on the gains. For either gold or not-gold.

Traditional IRA gold: pay no taxes on the money it cost to buy the gold. Pay "uncapped marginal" taxes when you withdraw.
Traditional IRA anything else: pay no taxes on the money it cost to buy the whatever. Pay "uncapped marginal" taxes when you withdraw.

In the IRA, you're only being taxed once, for either gold or not-gold.

The only difference here between gold and not-gold is the less favorable treatment for gold in taxable, where the tax on gains can (depending on income level) be higher.

[ochotona]

Taxable gold: pay "uncapped marginal" taxes on the money it cost to buy the gold,

I think where we differ is I don't value tax-deferment very much at all, maybe it's not about the gold at all. Given my asset size, and age, I see tax-deferred assets as a liability, and I'm trying to convert to Roth gradually over the next decade.... especially since I believe tax rates will be going up for me in retirement, not down. You only win in tax deferment if the tax rate is lower in retirement.

Everyone's situation is different. Many will have lower taxes in retirement. It's highly individualized.