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Recording GLD ETF expenses

LTUser92

How to record GLD expenses ? Only reduce basis with no cash or reduction is shares.

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LTUser92

1099-B tax forms show expenses as monthly Principal (?) transactions with proceeds, cost and g/l.
Proceeds is non cash (?). Cost reduces basis. G/L reported to IRS.

Tom Young

Do a return of capital for the appropriate amount, then "spend" that money using the Miscellaneous Expense action.

LTUser92

Thank you Superuser. Thought of that. Doesn’t address G/L. Just added that piece of info, G/L, as you were answering so your answer did address my original info. Appreciate it.

LTUser92

Thanks Tom. Entered ‘Return of Capital’ and corresponding ‘expenses’. Cost and cash are right. G/L not recorded so realized G/L reports are off for tax reporting.
GLD ETF is a popular investment so I figured there would be a transaction to properly record all components of GLD (SLV and …) expenses. Thanks for your prompt response.

q_lurker

Do you have the exact numbers for all three parts. Seem to me they should add properly — RtrnCap + G/L = MiscExp. Otherwise it would be funny books.

If they do add that way, you’d use a Long term cap gain distribution for that component.

Tom Young

GLD is organized as a trust so the fiction is that every "shareholder" owns their proportional share of the gold in the vaults and incurs their proportional share of the expenses to run the trust. The trust itself sells gold periodically and each shareholder's piece of each sale - 12 sales this year - can show up on a 1099-B. As I recall, some brokers do show these sales on their 1099-Bs and some don't and maybe that's still the case. (When I was a SU over at the TurboTax forum I answered a lot of these GLD/SLV posts.)

You need to make separate calculations for each lot of GLD you own and back when I did own some GLD, several lots, I did make the calculation, having to resort to an Excel spreadsheet to do so. In my case the gain or loss amounted to something less than $2 and while the Miscellaneous Expenses were more than that, they were non-deductible because all my Miscellaneous Expenses didn't get over the "hurdle amount" to make them deductible. (Due to tax law changes since then Miscellaneous Expenses aren't deductible at all.)

Plus, in order to get each lot's basis properly stated I'd of had to do a Remove and then a series of Adds. At that point I said "forget it", made no entries, reported the sales at a $0 basis for the income tax return, and deducted my original basis when I sold GLD, reporting that amount on my income taxes when I sold all my GLD.

And I'm still out of jail!

All the details for those calculations for the 2021 tax year are here: https://www.spdrgoldshares.com/media/GLD/file/SPDR-Gold-Trust-Tax-Information-2021.pdf

Jim_Harman

Just to be clear, do these transactions involve selling shares to pay the fees, or reduce your share count in some way? In that case you would record it as a Sell followed by a MiscExp.

Other than GLD's 0.4% management fee, which should be built into the share price, I don't see any mention of fees associated with GLD.

Tom Young

"Just to be clear, do these transactions involve selling shares to pay the fees, or reduce your share count in some way?"

NO. Each share just has a claim on a little less of the gold in the vaults.

"Other than GLD's 0.4% management fee, which should be built into the share price, I don't see any mention of fees associated with GLD."

The trust has all kinds of expenses associated with buying and selling gold, storing it, moving it, etc. Each shareholder gets their proportionate piece of these expenses.

LTUser92

Thanks Tom and Jim. I understand the expense from the GLD trust side. Was looking for a simple way to record this monthly expense in Quicken. It has no impact on shares, phantom proceeds are calculated, actual basis is reduced and actual G/L is calculated (phantom proceeds less actual reduction in cost basis). It appears that Quicken does not handle this expense. Closest, simplest workaround is the combination of Return of Capital and Misc Expense transactions. Actual IRS reportable G/L is missing. Thanks again.