GLD Sells Your Gold Every Month to Pay Itself, and the IRS Can Tax Those Sales at Up to 28%

SPDR Gold Trust (NYSEARCA:GLD) sells gold every month to pay its expenses. The trust holds no cash and earns no income, so it pays its bills in metal. The fund’s own FAQ states: “The Trustee sells a small quantity of gold every month in order to pay the Trust’s expenses.” As a result, “the amount of gold represented by each Share will decline over time.” Few owners read these disclosures.

How GLD Pays Its Fee With Your Gold

State Street Global Advisors lists GLD’s total annual expense ratio at 0.40%. Unlike a stock fund that covers its fee from dividends or cash, GLD generates no income. As a result, the custodian moves gold bars from the Trust’s allocated accounts to unallocated accounts, and the Trustee sells that gold to pay the bill. Your fee comes out of the metal itself.

As of Sep 25, 2026, GLD held $144.43 billion in assets, and State Street says monthly sales “have been very small in comparison to the total holdings of the Trust.” Still, since GLD’s November 18, 2004 launch, long-term holders have seen those sales compound.

Why the IRS Can Tax a Sale You Never Made

GLD is treated as a grantor trust for federal tax purposes, and the Trust pays no federal income tax while income and expenses flow through to shareholders. When the Trustee sells gold to cover fees, the tax code treats you as the seller. Gains on gold held more than one year receive collectibles treatment.

Gains on collectibles, including gold bullion, held more than one year are taxed at a maximum rate of 28%, rather than the 20% rate applicable to most other long-term capital gains. State Street Global Advisors also notes that if a shareholder is otherwise subject to a rate lower than 28%, the higher rate does not apply. That figure is a ceiling, and many retirees in lower brackets never reach it. For assets held one year or less, gains are generally taxed as ordinary income.

A Taxable Event That May Never Reach Your Tax Form

Because GLD sells only minimal amounts and distributes no proceeds, Treasury Regulations do not require reporting on Form 1099-B. Some brokers report them voluntarily; many do not. State Street guides shareholders to a worked example under Tax Reporting on its website. The practical result: a taxable event may never appear on your year-end paperwork.

Cheaper Gold Trusts Hold the Same Metal

iShares Gold Trust (NYSEARCA:IAU) charges 0.25% and held $68.37 billion in net assets as of May 5, 2026. SPDR Gold MiniShares (NYSEARCA:GLDM) and abrdn Physical Gold Shares (NYSEARCA:SGOL) also hold physical bullion at lower fees. A smaller fee means smaller monthly gold sales.

Returns reflect the gap. GLD gained 135.87% over five years, against 137.56% for IAU and 139.22% for GLDM. Over one year, GLD rose 9.74%, IAU 9.93%, and GLDM 10.07%.

GLD traded at $380.51 in a premarket quote on Sep 29, 2026, up 0.69% from the prior close, and is down 3.99% year-to-date. State Street Global Advisors put its NAV at $390.67 on Sep 25, 2026, with gold valued at an LBMA PM price of $4,261.05.

What GLD Holders Need to Do Before Tax Season

GLD’s higher fee is justified for active traders and institutions. State Street Global Advisors reports that the 30-day spread between bid and ask prices is 0.01%, and its scale supports large, frequent trades. A retiree holding gold for a decade outside a tax-advantaged account has the strongest reason to compare GLD against cheaper alternatives, since that investor pays the higher fee year after year for liquidity they rarely use. Anyone holding GLD outside a tax-advantaged account should do one thing before filing: check whether the broker’s composite statement reports the Trust’s gold sales. If it does not, pull State Street’s worked example under Tax Reporting and run the numbers, or hand it to your tax preparer. It is one of several IRS quirks that quietly drain retirement accounts, and we covered the rest in a free tax trap guide here.

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