Tax consequences of IAU, GLD, SLV, CEF.

[Jim Nickerson]

Below it taken from streetTRACKS prospectus.

5. How is GLD treated from a tax standpoint?
The United States Internal Revenue Service (IRS) treats gold as a collectible for long-term capital gains tax purposes. As such, gains recognized by individuals from the sale of streetTRACKS� Gold Shares are subject to a capital gains rate of 28% if held for more than one year. This rule extends to all gold held by the Trust. Although there are some restrictions applicable to retirement plans such as IRAs and 401ks investing in collectibles, streetTRACKS� Gold received a private letter ruling permitting investment by such retirement plans.

Does anyone know anything that would invalidate the statements above?

Are there any considerations that differ on hoding one or the other of these ETFS or CEF?

Jim

[jk]

found this

Tax wise CEF is a regulated investment company under US law, and the ETF is a trust under US law. The first has tax characteristics like any other stock on the market, the second "flows-through" income and expenses (if any) and gains, while capital gains, are "collectible" gains subject to a 28% maximum long term tax rate (which is not so bad).

i believe i've read the same analysis in several places. means use gld and slv in tax sheltered accounted, cef in taxable. this might even provide a rationale for cef's premium, which i had always assumed would be arbitraged away.