Exchange-traded funds backed by precious metals such as gold and silver are considered collectibles for tax purposes, according to accountants. That means they have a maximum federal tax rate of 28% on long-term capital gains. Stocks, bonds and other investments generally have a maximum rate of 20% on earnings. Cortez emphasized the importance of eliminating sales taxes, because in some states you end up paying taxes three times.
For those looking to invest in gold, a Gold IRA home storage option may be the best way to go in order to avoid these taxes. If you buy gold and silver, a state sales tax of 7 to 10% will apply to you. This illustrates how criminal this is in nine states, he said. And in every state except two or three, you'll be charged again for the third time. When the price is based on the content of precious metals, gold coins such as American Eagles can be exchanged for gold bars or vice versa made of the same metal.
However, if that same gold investor had converted his gold bars into silver bars, he would have enjoyed an 85.56% increase in wealth during the period and would not have paid taxes for the conversion. Whether an investor moves from physical possession to assigned storage or storage abroad, from coins to ingots or exchangeable tradable funds, or from gold to silver, buying and selling precious metals is ideal for similar exchanges and for preserving wealth, since the regulations were issued in 1991. Investors who own gold and silver can take advantage of the price differences and the rate of appreciation of gold and silver.