Investors that struck gold last year in one of the physically backed exchange traded funds have discovered a capital gains headache at tax time if bullion-backed ETFs are held in a taxable account. Investors considering such a commodity investment at this time may want to read on before doing so.

“We’ve seen a lot of gold ETFs this year, and we’re pulling out the last few hairs we have over them,” said Bill Fleming, a managing director in the personal financial services practice of PricewaterhouseCoopers, in a Reuters report. “A lot of ETFs have quarterly or monthly dispositions to pay for expenses. All of these are small dollar amounts, but you still have to figure out what your cost basis is.” [Commodity ETFs’ Tax Considerations]

Gold, silver and other metals are treated as collectibles by the Internal Revenue Service, meaning they are taxed at the special rate of 28% for the long term. Short-term gains are taxed at the same rate as other short-term capital gains.

The taxation for commodities is complex, and the tax hit is higher because the investor is taxed on any gains as well as the physical holding, which is higher. Amy Feldman for Reuters reports that the tax loopholes also applies to ETFs if they invest in physical holdings, such as bullion. [ETFs During the Tax Season: What to Expect]