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    TaxHelpNeeded's Avatar
    TaxHelpNeeded Posts: 29, Reputation: 1
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    #1

    Feb 22, 2010, 08:28 PM
    1099 B return of principal and collectible item
    I had invested in an ETF (GLD) that is backed by physical gold. I sold it after a year and as such it should qualify as long term. I have a couple of questions

    a) Is this to be treated as a collectible and hence the gain taxed at 28% instead of 15%?

    b) For this ETF, during last year the broker's 1099 -b lists for each month a small amount as "Return of Principal" usually 50-60 cents. The overall total for the year is around $6. However I never did receive this principal back. Also in a detailed section, (that is not submitted to the IRS per the broker) the equivalent amount's are reported as Investment Expense.
    I) Is this return of principal to be used to reduce my cost basis? (I'm thinking that the return of principal got balanced by the investment expense).
    ii) Do I need to list each Return of Principal on schedule D (assuming cost basis = gross proceeds if that is the answer to I) above)
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #2

    Apr 22, 2010, 10:25 AM
    a) No, as an ETF is considered to be an equity, not a collectible..

    As for the rest, you need to get professional help with your tax return to be sure this is reported accurately on your return
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