Why own NOT, and NOT cash or ETF's, in the US?
posted on
Nov 26, 2007 05:01PM
From Weekly Investor Alert at US Funds:
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For all the enthusiasm toward gold ETFs, some investors will be surprised to learn they are not as tax efficient as buying equities in gold-producing companies.
Gold ETFs are taxed at 28 percent, the same rate as collectibles such as gold coins. In contrast, long-term capital gains taken on stocks are only taxed at 15 percent. ==============
Guess what rate cash profits (interest received) is taxed at? Yep, standard tax rates.
In US, only long term capital gains are taxed at 15%. That makes it mighty attractive to invest in a junior explorer, with a good cash position and with great potential in this ongoing commodities bull market. This also allows the investor to protect the value of their savings and avoid the 'inflation tax' (inflation tax because you are paying tax on the 5% interest, which is about what you need to make just to keep up with inflation) paid on simple interest each year.
BK
