Gold ETF investors may be surprised by their tax bill on profits

Gold returns are shining — however traders holding gold exchange-traded funds might get hit with an unexpectedly excessive tax invoice on their earnings.

The Inside Income Service considers gold and different treasured metals to be “collectibles,” just like different bodily property like artwork, antiques, stamps, cash, wine, vehicles and uncommon comedian books.

That is additionally true of ETFs which can be bodily backed by treasured metals, in keeping with tax consultants.

Here is why that issues: Collectibles usually carry a 28% high federal tax fee on long-term capital features. (That fee applies to earnings on belongings held for longer than one yr.)

By comparability, shares and different belongings like actual property are usually topic to a decrease — 20% — most fee on long-term capital features.

Buyers in standard gold funds — together with SPDR Gold Shares (GLD), iShares Gold Belief (IAU), and abrdn Bodily Gold Shares ETF (SGOL) — could also be shocked to study they face a 28% high tax fee on long-term capital features, tax consultants clarify.

“The IRS treats such ETFs the identical as an funding within the metallic itself, which might be thought of an funding in collectibles,” wrote Emily Doak, director of ETF and index fund analysis on the Schwab Middle for Monetary Analysis.

The collectibles capital-gains tax fee solely applies to ETFs structured as trusts.

Buyers have racked up massive earnings on gold over the previous yr.

Spot gold costs hit an all-time excessive above $3,500 per ounce final week, up from roughly $2,200 to $2,300 a yr in the past. Gold futures costs are up about 23% in 2025 and 36% over the previous yr.

A barrage of tariffs introduced by President Donald Trump in early April fueled concern {that a} world commerce warfare will push the U.S. economic system into recession. Buyers sometimes see gold as a protected haven throughout instances of worry.  

Buyers who maintain shares, inventory funds and different conventional monetary belongings usually pay one in all three tax charges on their long-term capital features: 0%, 15% or a most fee of 20%. The speed will depend on their annual earnings.

Nonetheless, collectibles are completely different from shares.

Their long-term capital-gains tax charges align with the seven marginal income-tax charges, capped at a 28% most. (These marginal charges — 10%, 12%, 22%, 24%, 32%, 35% and 37% — are the identical ones staff pays on wages earned at work, for instance.)

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Here is an instance: An investor whose annual earnings locations them within the 12% marginal income-tax bracket would pay a 12% tax fee on their long-term collectibles earnings. An investor within the 37% tax bracket would have theirs capped at 28%.

In the meantime, traders who maintain shares or collectibles for one yr or much less pay a special tax fee on their earnings, often known as short-term capital-gains. They often are taxed on the similar fee as their strange earnings, wherever from 10% to 37%.

Taxpayers may additionally owe a 3.8% internet funding earnings tax or state and native taxes in extra to federal taxes.