questions on closed end funds (such as GTU, CEF, PHYS)

[cabronjames]

I just want to verify a few statements, as an American investing at a US-based custodian account (such as Vanguard), about investing in a precious metals (PM) closed end fund (such as GTU, CEF, PHYS) in a tax-sheltered account (IRA).

Pls confirm or correct the following statements if u have a chance.

1 It is conceivable that one could owe tax within an tax-sheltered account, if a particular asset had UBTI - Unrelated Business Income Tax in a particular year.  The nature of these PM closed end funds is such that they are very unlikely to have UBTI http://en.wikipedia.org/wiki/Unrelated_ ... Income_Tax, & have never had UBTI in past years.

2 When holding a PM closed end fund, one does NOT have to file IRS form 8621 about a PFIC (passive foreign investment company) ever.  For example, one could buy 100 shares of GTU within their IRA in 2011, sell 30 shares of GTU in 2013 for a rebalance using the proceeds to purchase TLT, & sell the remaining 70 shares of GTU in 2017 again for rebalancing into TLT.  At no time in any year from 2011 to 2017's annual tax return, is any extra paperwork such as IRS #8621 ever need to be filed.

Thx again.

[foglifter]

Not sure about #1, but definitely yes on #2. I own GTU in my Roth IRA and never filed any forms.

PM CEF (closed-end fund) investing in the taxable accounts was discussed in detail on this forum not that long ago, try to do a search and you'll surely find what you're looking for. Both GTU and CEF (Central Fund of Canada) are PFICs as far as I know.