I hold the Gold ETF (GLD) and have received a 1099B for this fund. There are several small amounts listed on the Form called Principal Payments.
"Widely Held Fixed Investment Trusts (“WHFIT”) These special reporting requirements for these securities will create signifi cant diff erences between the amounts reported on tax forms compared to what appeared in your monthly statements. The primary reasons for that are as follows: (a) the income must be reported in the gross amount, including any fees or expenses that were deducted by the Trustee prior the distribution, and (b) the income must be reported be based on the tax year and date it was received by the Trustee (the “record date”) rather than when it was paid to you (the “payment date”). These securities include royalty trusts, commodity trusts, mortgage pools, HOLDRS trusts, many unit investment trusts (UITs) and some exchange traded funds (ETFs)."
"Commodity trusts – a type of “WHFIT” These trusts frequently do not make any cash distributions to investors, but simply hold gold or silver. However, if the trustee sells part of that commodity to pay expenses, that results in Form 1099-B reporting to you to account for the sale and an off setting expense amount that you will find in the “Federal Nonreportable” section of your statement. Examples include iShares COMEX Gold (IAU), iShares Silver (SLV) and SPDR Gold ETF (GLD)."
(I think the above is from the Wells Fargo tax guide, but all the guides are using pretty much the same boilerplate.)
Anyway, here's the question(s):
It sounds to me like I need to list each of these small Principal Payments on Schedule D, with no associated basis. Correct?
Since the "off setting expenses" mentioned above get reported in a "Federal Nonreportable" section of the 1099B it sounds like they don't go anywhere in the tax return. Correct?
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