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Strategies & Market Trends : Heinz Blasnik- Views You Can Use -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (3956)	12/24/2003 12:43:26 PM
From: ild	Read Replies (1) \| Respond to of 4905

The trust’s costs will be paid for by selling gold from the vaults. This will, over time, reduce the gold supporting each note. However, with an initial cost structure of 0.2-0.3% of NAV per annum, value attrition should be slow. Under current U.S. tax law, the new Equity Gold Trust will be classified as a “grantor trust.” Consequently, the trust will not pay U.S. tax; instead its income and expenses will flow through to the shareholders. Gains from sales of the shares in the trust will be classified as being from the sale of collectables and will qualify for a higher 28% long-term tax rate versus the ruling 15% for other long-term gains. This complication seems set to flow into ownership in tax-qualified accounts. Under regulation 408(m), buying a “collectable” in a tax- qualified account is considered to be a taxable distribution of funds from the account to the beneficial holder. This suggests that special attention should be paid to the tax consequences of this investment, which we think will likely generate other products more suited to certain investors.

To: Wyätt Gwyön who wrote (3956)	12/25/2003 6:02:13 PM
From: EL KABONG!!!	Read Replies (2) \| Respond to of 4905

Hi Darfot, I've been told (not confirmed yet) that the taxes on the Australian Gold ETF or the London Gold ETF would involve first paying (and deducting from the taxable amount in the USA) the respective foreign taxes, and then paying the respective USA (or Canadian) taxes on what profits remain. In the USA, any profits are considered to be short term capital gains, and taxed at ordinary income rates, which depending upon an individual's tax bracket, could easily "eat up" enough of the potential profits to seriously impact upon the risk/reward ratio of investing in the ETF in the first place. A better choice is to wait for the USA-based Gold ETF and avoid the issue of foreign taxes altogether. But an even wiser choice might be to just buy and hold bullion yourself. The issues of storage and insurance can be mitigated somewhat by using the relative safety of one or more safe deposit boxes in a secure financial institution, or if you don't mind the risk, simply bury your "treasure" in a secure location under your home's foundation and forget about storage costs and insurance... <g> KJC