IRS Tax Rule Hits Retirees with Open Gold Futures Contracts

The IRS has a unique tax rule that affects investors who hold open gold futures contracts. According to Section 1256, the IRS treats these contracts as if they were sold at year-end, regardless of whether the investor actually closes the trade or not.

This means that investors must recognize gains or losses from these contracts, even if they haven't closed them yet. This can increase taxable income for retirees, which in turn may make more of their Social Security benefits taxable and raise future Medicare premiums through IRMAA surcharges.