How to Tax-Loss Harvest Gold?

[rhymenocerous]

I hold GTU in a taxable account and it currently has a $3k loss that I would like to harvest.  What can I purchase instead that won't trigger the wash sale rule?  GLD and IAU seem too similar to GTU to me since they both hold the same underlying asset, even if it's packaged differently (ETF vs closed-end fund).  What about switching to CEF (which holds both silver and gold)?  I don't really want to sit in cash for 30 days, for fear of missing some kind of gold rally.

[moda0306]

If you're afraid of holding GLD or IAU (I wouldn't be, but I tend to roll the dice sometimes), a gold/silver mix could work well.  Maybe just PCRAX or some commodity fund.

Or hey, maybe a good time to go get some physical stuff!

Your call.  I really wouldn't worry.  The IRS has that $3,000 for a reason.  I don't think they particularly enjoy trying to decipher what "substantially similar" really means @ a $1,000 a pop.

[BearBones]

Agree with Moda. Not the same instruments. Realize that you are selling at a discount, although only 2% now. Looks like CEF is 1.4% discount, so that might help when buying.

[Reub]

I just noticed that I have a HUGE loss sitting there on GTU in a taxable account. I believe that I will have to sell most of my beloved GTU and replace immediately with IAU to harvest it. Any thoughts?

[Libertarian666]

I just noticed that I have a HUGE loss sitting there on GTU in a taxable account. I believe that I will have to sell most of my beloved GTU and replace immediately with IAU to harvest it. Any thoughts?

Why sell more than you need to balance gains and the $3000 write-off against regular income? I don't see the advantage.

[Reub]

I just noticed that I have a HUGE loss sitting there on GTU in a taxable account. I believe that I will have to sell most of my beloved GTU and replace immediately with IAU to harvest it. Any thoughts?

Why sell more than you need to balance gains and the $3000 write-off against regular income? I don't see the advantage.

Thanks, Libertarian666! This is why I don't do my own taxes.
I'm guessing that mutual fund distributions and capital gains could be balanced by this loss?
Also, isn't there some kind of a carry-over to the next year on the loss, or even indefinitely?

[craigr]

If you swap into a fund you don't really want and there is a gain you'll be stuck with it unless you want to pay taxes to move back into what you had before.

So for the OCD types it could cause aggravation because you may have a bunch of funds in your portfolio that essentially are identical with gains in each. It increases bookkeeping issues as well.

I personally just sell and wait 31 days and re-buy what I already know works. You not only avoid surprises buying into a fund you maybe know less about, but the IRS has no footing to call you out on it.

Yes it could go up over that 30 days, but it could go down. I've found it a wash over the years whether I was right or wrong by waiting in cash.

[Libertarian666]

I just noticed that I have a HUGE loss sitting there on GTU in a taxable account. I believe that I will have to sell most of my beloved GTU and replace immediately with IAU to harvest it. Any thoughts?

Why sell more than you need to balance gains and the $3000 write-off against regular income? I don't see the advantage.

Thanks, Libertarian666! This is why I don't do my own taxes.
I'm guessing that mutual fund distributions and capital gains could be balanced by this loss?
Also, isn't there some kind of a carry-over to the next year on the loss, or even indefinitely?

Yes, capital gains, including those from mutual fund distributions, can be balanced by the loss. You can also carry the loss forward, but it can take a long time to use it up at $3000/year if you don't have any future gains to offset it.