Q. If I buy gold as an inflation hedge, will I qualify for low-taxed capital gain if I sell it after one year? C.R.G., Sioux Falls, S.D.
A. No. Generally, investing in gold bullion or gold coins is treated as an investment in a “collectible.” The sale of a collectible is taxed at a 28% tax rate if held longer than a year—almost twice the maximum 15% tax rate for “regular” long-term capital gains.
The same rule applies if you buy gold through an exchange-traded fund (ETF). But stocks in gold mining companies are treated like other securities eligible for the “regular” capital gains rates.
Tip: Other special rules apply to investments in gold futures. See your tax pro for details.