Wondering how SLV and GLD are taxed. These are grantor trusts which hold physical metals and my understanding is that they are taxed as collectibles at 28% in a unqualified account. But what will happen if I invest in a qualified account with these?
I have a 401K which I rolled over to a rollover ira brokerage account at Fidelity. I also have a roth ira. If I invest in GLD and SLV in these qualifed accounts will they get taxed as ordinary income when I start taking the money out or will they be taxed differently since they are collectibles at the 28% rate?
All distributions from a qualified retirement account (including an IRA) are taxed as ordinary income. Note that collectibles gain is taxed at a maximum rate of 28%. The rate may be lower depending on the amount of your other income. See the Schedule D Tax Worksheet in the Schedule D instructions to figure the rate that would apply to your gains.
Distributions of collectibles from a qualified retirement account are taxed at whatever marginal rate applies to your taxable income; they are not subject to the 28% maximum rate that applies to distributions of collectibles. If, for example, your taxable income in the year of distribution is $1 million, the distributions will be taxed at 37% (using 2020 rates).
You should also be aware of SPDR-Gold-Trust-Tax-Information which explains that gold is sold monthly to get dollars to pay for Trust expenses and the proceeds flow thru to investors. Proceeds and cost basis may need to be computed for each of those sales for each share purchase, so there could be many computations. Brokers might or might not report these and if they do they might or might not be correct. There is probably something similar for other grantor trusts.