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Actually, not only can you but it's much easier than trying to own actual physical bullion. You can do that in an IRA but it's very complicated and there are easier ways to get precious metals into your IRA - both bullion and miners.
Either of these would be trading vehicles. For longer term holding I'd go with CEF for bullion as it's 55/45 gold/silver . . . and they really have it on hand. If I was going to play this sucker, I'd hit junior silver miners (like rono is doing currently, TYVM!). That's where the serious leverage occurs.
these funds have no carry (distributions) and are very volatile. why wouldn't you want to have them in your taxable account to take advantage of any possible loss harvesting and keep IRA for the ordinary income producing stuff (bonds)? same goes for CEF.. just make sure you file your PFIC form annually.
There's a structural difference between CEF and GLD which makes their tax treatments very different.
As you noted, CEF should qualify as a qualified electing fund (QEF). Basically, it gets treated as a closed end fund that just happens to own precious metals. So it gets the usual cap gains treatment.
On the other hand, GLD is structured as a grantor trust, meaning that the shares represent proportional ownership of the actual gold (and not shares of a company that happens to have gold as its only asset). Since you own the gold, any gains you recognize will be subject to collectibles tax, not cap gains tax. That's generally 28%, and a good reason not to own it in a taxable account.
The last question on that page deals with the taxation of GLD. It also addresses the original question in this thread:
Until 1997 gold was treated as a collectible. You cannot own collectibles in an IRA. Thus you could not own something like GLD in an IRA. Since 1997, gold bullion products are treated as investments, not collectibles, for IRA purposes. So you're allowed to own them in an IRA. (But you still can't own gold jewelry in an IRA.)
Comments
Actually, not only can you but it's much easier than trying to own actual physical bullion. You can do that in an IRA but it's very complicated and there are easier ways to get precious metals into your IRA - both bullion and miners.
Either of these would be trading vehicles. For longer term holding I'd go with CEF for
bullion as it's 55/45 gold/silver . . . and they really have it on hand. If I was going to play this sucker, I'd hit junior silver miners (like rono is doing currently, TYVM!). That's where the serious leverage occurs.
peace,
rono
Tony
As you noted, CEF should qualify as a qualified electing fund (QEF). Basically, it gets treated as a closed end fund that just happens to own precious metals. So it gets the usual cap gains treatment.
On the other hand, GLD is structured as a grantor trust, meaning that the shares represent proportional ownership of the actual gold (and not shares of a company that happens to have gold as its only asset). Since you own the gold, any gains you recognize will be subject to collectibles tax, not cap gains tax. That's generally 28%, and a good reason not to own it in a taxable account.
http://www.etf.com/sections/features/21952-structure-matters-how-gold-fund-gld-works.html?fullart=1&start=3
The last question on that page deals with the taxation of GLD. It also addresses the original question in this thread:
Until 1997 gold was treated as a collectible. You cannot own collectibles in an IRA. Thus you could not own something like GLD in an IRA. Since 1997, gold bullion products are treated as investments, not collectibles, for IRA purposes. So you're allowed to own them in an IRA. (But you still can't own gold jewelry in an IRA.)