Gold ETF buyers could also be stunned by their tax invoice on earnings

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

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

That is additionally true of ETFs which might be bodily backed by treasured metals, in accordance with tax specialists.

Here is why that issues: Collectibles typically carry a 28% prime federal tax price on long-term capital good points. (That price applies to earnings on belongings held for longer than one yr.)

By comparability, shares and different belongings like actual property are typically topic to a decrease — 20% — most price on long-term capital good points.

Traders in common gold funds — together with SPDR Gold Shares (GLD), iShares Gold Belief (IAU), and abrdn Bodily Gold Shares ETF (SGOL) — could also be stunned to study they face a 28% prime tax price on long-term capital good points, tax specialists clarify.

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

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

Traders 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} international commerce warfare will push the U.S. financial system into recession. Traders usually see gold as a secure haven throughout instances of concern.  

Traders who maintain shares, inventory funds and different conventional monetary belongings typically pay considered one of three tax charges on their long-term capital good points: 0%, 15% or a most price of 20%. The speed is dependent upon 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 workers 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 price on their long-term collectibles earnings. An investor within the 37% tax bracket would have theirs capped at 28%.

In the meantime, buyers who maintain shares or collectibles for one yr or much less pay a distinct tax price on their earnings, often called short-term capital-gains. They often are taxed on the similar price as their extraordinary earnings, anyplace from 10% to 37%.

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