2024年4月29日星期一

Dividends up to 11%: The safest way to weather this market storm

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Beware of Special Tax Rules

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Beware of Special Tax Rules

By Scott Chan

 

The tax season has come and gone. Hopefully you have received or will be receiving a nice refund. If you had to pay, hopefully at least you didn't get any nasty surprises from Uncle Sam.

As an investor—since you are reading this, I assume you do invest—there are so many rules when it comes to taxation that it's easy to be surprised at tax time. One common way to be surprised is to find out how the IRS treats certain investment incomes.

In today's investment landscape, it's quite easy to venture beyond common U.S. stocks. Let's look at several popular alternative investments and see how they are taxed. Note that this article is intended for general informational purposes only. It is not meant to be tax advice. Please be sure to check with a licensed tax professional when in doubt.

Precious Metal ETFs

Over the past twenty years or so, gold and silver ETFs have risen in popularity and there've never been as many choices as there are today.

SPDR Gold Trust (GLD) is the oldest and most liquid gold ETF available. iShares Silver Trust (SLV) is its silver counterpart. The IRS considers both ETFs to be collectibles.

Long-term capital gains on GLD and SLV are taxed at your marginal tax rate, which is the rate paid on your highest dollar of taxable income, up to 28%. Since the normal long-term capital gains tax rate is capped at 20% no matter your income, when you make money on GLD and SLV, you do have to share more of your profit with Uncle Sam. (Short-term capital gains are taxed at your marginal tax rate, which has a maximum of 37%.)

Passive Foreign Investment Companies

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