I had loss from SLV etf in 2014. I held it for over a year. Using turbo tax I entered the info from K-1 form. I also entered it on schedule D under long term losses. Is it the correct way to report it? I followed the instructions from turbo tax when doing taxes. But I read in iShares Silver Trust prospectus that "Under current law, gains recognized by individuals from the sale of “collectibles,” including silver, held for more than one year are taxed at a maximum rate of 28%, rather than the current maximum 20% rate applicable to most other long-term capital gains." I am wandering if I did my taxes correctly.
How do I report income loss from SLV etf that issues K-1 form?
- Thread starter xxtinkax
- Start date
Likely you did.
Our greedy, self-serving government doesn't want you to protect yourself from their money-printing, inflationary policies... of course.
So... they tax "precious metals bullion and bullion proxies" at a higher rate... to discourage us from investing in them. (Great, huh?)
You'll want to try deleting it from each spot in turn, making sure that Turbotax doesn't double count it. For example, if you entered it on your K-1 and your tax went down by $100, then you went directly to the schedule D and entered it and your tax went down by $100 more (or any amount more), then you/Turbotax didn't do it correctly. If it only went down once you're OK. My guess is that you did it wrong by reporting it on Schedule D since the K-1 would have flowed to your ordinary income and reduced that by the amount of the loss already.
Its more a matter of how SLV is set up than some special "gold tax". By reporting on a K-1 the income/loss flows to your ordinary income rather than being treated as an investment. This is the same as a doctor who sets up an LLC or partnership and the profit flows to his personal return as income, for example.
Its more a matter of how SLV is set up than some special "gold tax". By reporting on a K-1 the income/loss flows to your ordinary income rather than being treated as an investment. This is the same as a doctor who sets up an LLC or partnership and the profit flows to his personal return as income, for example.
WRONG!
K-1 has nothing to with YOUR TRADING. K-1 is all about THE ENTITY and YOUR SHARE of gain, loss, deductions, and credits of THE ENTITY, in this case the SLV Trust, in which you became a partner in when you acquired it, with an intent to be traded for profit or loss.
As for being a special gold tax, IT IS! "Exception" is a more appropriate descriptive instead of "special" however. The IRS considers certain investment vehicles, in this case SLV with a narrow and physical underlying as a collectible. Simple as that.
I should clarify because I think there are two things going on at once and I didn't do a great job explaining it. First, the trust itself has a gain or loss, as tiddlywinks correctly points out, that is reported on the K-1. This flows to your regular income, regardless of if you sold the stock during that period or not. If you also sold the stock, the difference between your basis and the sales price goes on a schedule D. Just to confuse matters more, the K-1 profit/loss from this year and any previous years you held it may impact your basis on the schedule D.
Short answer I should have started with, don't listen to an idiot like me or anyone else on a bulletin board on this one, spend a few bucks for a professional opinion from a real CPA, not a H&R Block type who wouldn't get this level of complexity. And if you're investing in these kinds of trusts, figure in your accounting costs when you think about what kind of returns you're planning to get.
Short answer I should have started with, don't listen to an idiot like me or anyone else on a bulletin board on this one, spend a few bucks for a professional opinion from a real CPA, not a H&R Block type who wouldn't get this level of complexity. And if you're investing in these kinds of trusts, figure in your accounting costs when you think about what kind of returns you're planning to get.
I read IRS publications and tried it on TurboTax. As tiddlywinks informed us here the K-1 is separate and trading is separate. So we have to enter whatever is on K-1 in correct section on TurboTax or other software. And than report the actual trade just as a stock trade, but we have to mark it as a collectible. When using the turbotax, you enter it as a regular stock trade, but than you have to mark EDIT DETAILS and press EDIT. Then mark "I need to add or fix info about this sale that's on my Form 1099-B". On the next page we mark "This is a sale of a collectible."
It did not make a difference for me, because I had a loss.
I changed it to income just to see if it will tax me at 28%, but to my surprise it did not.
I looked again at K-1 form and there is a Box 9b that refers to Collectibles (28%). When I entered income just to test it in that box, than it was taxed at 28%. But that box was blank on my k-1 form.
Anyway, for me it did not make any difference, so I think I should be fine. I just typed it in case anyone else needs that info. Thank you.
It did not make a difference for me, because I had a loss.
I changed it to income just to see if it will tax me at 28%, but to my surprise it did not.
I looked again at K-1 form and there is a Box 9b that refers to Collectibles (28%). When I entered income just to test it in that box, than it was taxed at 28%. But that box was blank on my k-1 form.
Anyway, for me it did not make any difference, so I think I should be fine. I just typed it in case anyone else needs that info. Thank you.
Excerpt from http://greentradertax.com/trader-tax-center/tax-treatment/tax-treatment-etfs/
Precious metals ETFs
Physically backed precious metals ETFs may not use the RIC structure either. Although they could use the PTP structure, they usually choose the publicly traded trust (PTT) structure (also known as a grantor trust). A PTT issues an annual Schedule K-1, passing through tax treatment to the investor, which in this case is the “collectibles” rate on sales of physically backed precious metals (such as gold bullion). Selling a precious-metal ETF is deemed a sale of a precious metal, calling for short-term and long-term “collectibles rate” capital gains tax treatment. If collectibles are held over one year (long-term), sales are taxed at the “collectibles” tax rate — the taxpayer’s ordinary rate capped at 28%. Short-term capital gains are taxed at the ordinary rate. (Read our blog “Tax Treatment for Precious Metals” which includes discussion on all sorts of precious-metal ETFs and ETNs. Mining ETFs are securities.