Q. Are ETFs more tax efficient?
A. Not always true.
ETFs that hold futures contracts will issue a K-1 tax form instead of 1099, which can be a hassle to deal with in tax filing time.
Some ETFs, for example, SPDR Gold Shares (GLD) and iShares Silver Trust (SLV), are taxed as collectibles, which means capital gains are taxed at a maximum 28% rather than the ordinary 15%.
Actively managed ETFs with high turnovers could also create unexpected capital gain distributions.
How to deal with the not tax friendly ETFs?
Trade them in your tax-deferred accounts.
A. Not always true.
ETFs that hold futures contracts will issue a K-1 tax form instead of 1099, which can be a hassle to deal with in tax filing time.
Some ETFs, for example, SPDR Gold Shares (GLD) and iShares Silver Trust (SLV), are taxed as collectibles, which means capital gains are taxed at a maximum 28% rather than the ordinary 15%.
Actively managed ETFs with high turnovers could also create unexpected capital gain distributions.
How to deal with the not tax friendly ETFs?
Trade them in your tax-deferred accounts.
RSS Feed
