Tax Information for Clients Invested in Widely Held Investment Trusts
March 2010
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EmailBeginning this year, tax reporting obligations have increased due to new IRS requirements for Widely Held Fixed Investment Trusts. Examples of WHFITs include commodity trusts such as SPDR Gold Trust, iShares Silver Trust, iShares Comex Gold Trust , EFTS Gold Trust. For tax purposes, income distributed from commodity trusts has always flowed through to underlying investors. What’s new for the 2009 tax year, however, is that investors are now taxed on certain underlying principal activity occurring at the trust level, even if distributions were not made to the investor.
A common practice for commodity trusts is to sell gold or silver for payment of underlying expenses. However, the IRS’ new WHFIT reporting rules require investors to report their pro rata share of the underlying asset’s proceeds from these sales and expenses on their 2009 tax return.
To make this new tax reporting as simple as possible, Fiduciary Trust prepared documentation for clients who were invested in commodity trusts during 2009. These clients received this documentation the week of March 8th.
If you have questions, please feel free to get in touch with your Fiduciary Trust contact. We encourage clients to consult with their tax advisor on handling the necessary reporting for these assets, due to the complexity of these new IRS reporting requirements.
To set up an appointment or to learn more about Fiduciary Trust, please contact Luke Fowler in our New York headquarters at (866) 624-3834 or l.fowler@ftci.com. You may also complete the information below and we will respond to you as soon as possible.
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