Futures-based commodity ETFs will have 60% of gains taxed at the long-term capital gains rate for n investor’s income class and will have 40% of gains taxed at the short-term capital gains rate, regardless of how long the ETF is held. ETFs that track single currencies or basket of currencies will also be taxed the same as futures funds. Physically-backed commodity ETFs are taxed as collectibles, which taxes gains at typically 28% versus 15% for equities. [4 Types of Commodity ETFs.]
The income distributions of fixed-income ETFs are taxed as ordinary income as compared to dividend taxes.
Investors should keep tax implications in mind year round when investing so as to be better prepared during tax season. It should be noted that we are not tax experts and investors should still consult their tax experts.
For more information on ETF taxes, visit our taxes category.
Max Chen contributed to this article.