Income tax type

What is it?

The Income tax type defines how income generated by an ETF is classified for tax purposes. This classification determines the applicable tax rate and treatment under different jurisdictions.

Possible values:

• Collectibles – applies to investments classified as collectibles (e.g., certain precious metals ETFs), which are typically taxed at a higher rate.
• 60/40 – is a tax treatment where 60% of gains are taxed as long-term capital gains and 40% as short-term capital gains, commonly applied to certain futures contracts.
• Capital gains – income classified as capital gains, which may be subject to lower tax rates depending on the holding period and jurisdiction.
• Ordinary income – income taxed at regular rates, generally higher than capital gains tax rates.

Why is it important?

The income tax type impacts:

• Investor tax liability – different tax treatments can significantly affect after-tax returns.
• Investment strategy – investors may prefer ETFs with favorable tax classifications.
• Tax reporting – knowing the tax classification helps with accurate tax filings and compliance.