Tax harvest GLD and buy GTU?

[PP67]

I am getting close to a 15/35 rebalancing band (stocks = 33%) in my taxable account.  I also hold GLD in this account that is down 19.3% since purchase in 1/2012.  My thought was when I rebalance, I could sell all my GLD and buy GTU (NAV -4.19% as of today) to take the loss on my GLD for this tax year and offset my stock gains that I need to sell to rebalance.

Is the consensus on this forum that GTU is significantly different enough from GLD to no trigger a wash sale?  I also understand that there is some form that I must also file when I buy GTU to get the favorable tax treatment when I sell it...

Does this sound like a prudent move?  Am I missing something?

Thanks!

[PP67]

Thanks... I had another idea.... I also have a loss on my TLT holdings (imagine that!) so what if I sold all my GLD and TLT holdings and bought PRPFX... Hold the PRPFX for at least 31 days... Sell the PRPFX and just enough of my VTI to rebalance and buy GTU (or some physical), TLT and SHY to get back to 25/25/25/25?  That would give me a pretty good loss (if that could be considered good) to offset regular taxable income...  I would also be fairly well covered (less transaction costs) the 31 day (or more) period as PRPFX seems pretty stable...

What do you guys think of that approach?

[PP67]

I saw in a previous thread that Fidelity requires you to hold PRPFX for 60 days to avoid paying some short term fee... Does anyone know what these fees are?  I think foglifter uses PRPFX in his Fidelity account as a "cash" accumulator...  Is there any way to cost-effectively/automatically get your dividends and interest proceeds in your FIdelity account automatically invested in PRPFX without (or just minor) transaction fees, etc? 

All thoughts/comments welcome...

[buddtholomew]

I am getting close to a 15/35 rebalancing band (stocks = 33%) in my taxable account.  I also hold GLD in this account that is down 19.3% since purchase in 1/2012.  My thought was when I rebalance, I could sell all my GLD and buy GTU (NAV -4.19% as of today) to take the loss on my GLD for this tax year and offset my stock gains that I need to sell to rebalance.

Is the consensus on this forum that GTU is significantly different enough from GLD to no trigger a wash sale?  I also understand that there is some form that I must also file when I buy GTU to get the favorable tax treatment when I sell it...

Does this sound like a prudent move?  Am I missing something?

Thanks!

I plan to TLH GLD for physical in taxable. Are the sums too large to purchase physical in one batch?

[Ad Orientem]

I am a fairly lonely minority on this board who does not believe closed ended funds are appropriate for a PP. They do not track their respective indexes and their price per share can be skewed dramatically by factors beyond the actual market movement. That said, my objections are not widely credited here. Do your own due diligence.

Caveat emptor.

[jason]

The way I look at it, at least in a taxable account, it's very hard to lose with GTU as long as you are not paying a premium because GTU is taxed at the long term capital gains rate (as long as you file the correct paperwork with the IRS), saving you 8% from the collectibles rate that gold ETFs and physical gold are taxed at.  Even during gold's recent crash when people were dumping GTU, I didn't see the discount dropping below 7%.  Buying GTU now with the current discount of around 4%, GTU would have to be selling at a 12% discount in order for you to lose money when you sell (after holding for 1 year) when you take into account the 8% savings on the collectibles tax rate.  Also, you are likely to be selling GTU to re-balance when gold is climbing, increasing the odds that GTU will be selling at a smaller discount or premium, giving you some free money when you re-balance.  Many people believe that GTU is less likely to be using questionable tactics such as fractional reserves, and it therefore less likely to default, as compared to the gold ETFs.  Disclaimer: I am not an accountant, but this is what my CPA told me in regards to taxes. Consult a tax professional.

[PP67]

Thanks for your input, everyone...  Lots of pros and cons to weigh...  I probably should talk to a tax guy and get it resolved in my mind before the end of the year!

Again, thanks everyone!