Looking for Hidden Taxes

When it comes to taxes, not all ETFs are created equal.  That’s the message in Jason Zweig‘s latest column Watch Out for Hidden Tax Traps Inside ETFs.

Zweig writes that commodity and currency ETFs are taxed differently than funds that invest in stocks or bonds.  As a result, investors may owe taxes on unrealized capital gains or pay a rate much higher than the 15% rate on qualified dividends and long-term capital gains.

Exchange traded funds highlighted by Zweig include the US Oil Fund (USO), SPDR Gold Shares (GLD) and the iPath British Pound USD Exchange Rate ETN (GBB).

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