Free Writing Prospectus

VanEck Merk Gold Trust

2016 Tax Reporting Statement

0001546652

Pursuant to 433/163

333-180868

 

VanEck Merk Gold Trust
2016 Grantor Trust Tax Reporting Statement
EIN: 466582016
CUSIP: 921078101
Ticker: OUNZ

 

The following information is being provided to assist Shareholders of the VanEck Merk Gold Trust with reporting of their taxable income and expenses for the period January 1, 2016 through December 31, 2016, pursuant to Treasury Regulation Section 1.671-5. Under this regulation, the VanEck Merk Gold Trust is considered a "non-mortgage widely held fixed investment trust."

 

TAXATION OF THE TRUST

 

The VanEck Merk Gold Trust is a grantor trust for U.S. federal income tax purposes. As a result, the Trust itself is not subject to U.S. federal income tax. Instead, the Trust’s income and expenses “flow through” to the Shareholders.

 

TAXATION OF U.S. INDIVIDUAL SHAREHOLDERS

 

Shareholders generally will be treated, for U.S. federal income tax purposes, as if they directly owned a pro rata share of the underlying assets held in the Trust. Shareholders also will be treated as if they directly received their respective pro rata shares of the Trust’s income and proceeds, and directly incurred their pro rata share of the Trust’s expenses. Most state and local tax authorities follow U.S. Income tax rules in this regard. However, Shareholders should contact their own tax advisors as to the state and local tax consequences of ownership of OUNZ shares.

 

The Trust holds only gold bullion and, accordingly, received no income during the year.

 

The Trust issues and allocates shares to the Sponsor in lieu of paying the fee to compensate the Sponsor (Sponsor's Fee) in cash, eliminating the need for the Trust to sell gold to raise cash to pay the Sponsor's Fee. In 2016, all of the Trust's expenses were paid by the Sponsor. However, for tax reporting purposes, the Trust will treat the issuance of shares to the Sponsor as payment of the Sponsor's Fee and/or reimbursement of the Trust's expenses and/or liabilities as a taxable exchange by the Trust of the portion of the underlying gold represented by those shares and thus will also constitute a taxable event for investors. As a result, the tax information below refers to gold sold by the Trust.

 

Because the Trust sold only a de minimis amount of gold for payment of Trust expenses during the year and made no distributions of sale proceeds to its Shareholders, under Treas. Reg. Sec. 1.671-5(c)(2)(iv)(B) neither the Trust nor brokers are required to report the gross proceeds of Trust sales to Shareholders on Form 1099B. Certain brokers may nevertheless elect to report these proceeds to their customers on a composite Form 1099B. For those Shareholders who have not received this information on Form 1099B, it is contained in the attached 2016 Gross Proceeds File together with an example illustrating how a Shareholder should calculate gain or loss.

 

 

 

VanEck Merk Gold Trust 2016 EXPENSE FILE

 

Date  Expenses
Per Share		 
January   0.00326740 
February   0.00368534 
March   0.00418974 
April   0.00394109 
May   0.00348649 
June   0.00405642 
July   0.00443310 
August   0.00444823 
September   0.00459204 
October   0.00391691 
November   0.00400073 
December   0.00444920 
Total for year   0.04846669 

 

How to Calculate the Shareholder’s Investment Expenses

 

Identify in the table above the months (full and partial) in which the Shareholder held shares in the VanEck Merk Gold Trust (OUNZ). The amount in the column labeled “Expenses Per Share," represents the amount of investment expense paid per share for a full month. For any month in which the shares were not held on each day in such month, the expenses should be pro-rated based on the number of days held.

 

Example illustrating calculation of a Shareholder's 2016 VanEck Merk Gold Trust Investment Expenses

 

Assume that a Shareholder purchased 200 shares on June 15, 2016 and sold them on November 15, 2016. For the month of June, Shareholder's expenses are $0.00405642 x (15/30) = $0.00202821 per share. For the months of July through October, the expenses per share are as shown. For the month of November Shareholder's expenses are $0.00200037 per share (0.00400073 x (15/30)). The total expenses for Shareholder are therefore $0.02141886 per share, or $4.28.

 

  Total Expenses per Share  $0.02141886 
  Total Shares   200 
  Total Expense  $4.28 
  (1040 Sch A)     

 

 1 
 

 

VanEck Merk Gold Trust 2016 Gross Proceeds File

 

Date   Gold Ounces
Per Share		   Per Share Gold
Ounces Sold To
Cover Expenses		   Proceeds Per
Share		 
 01/01/2016    0.00993810           
 01/02/2016    0.00993810           
 01/03/2016    0.00993810           
 01/04/2016    0.00993439           
 01/05/2016    0.00993439           
 01/06/2016    0.00993439           
 01/07/2016    0.00993439           
 01/08/2016    0.00993439           
 01/09/2016    0.00993439           
 01/10/2016    0.00993439           
 01/11/2016    0.00993439           
 01/12/2016    0.00993439           
 01/13/2016    0.00993439           
 01/14/2016    0.00993439           
 01/15/2016    0.00993439           
 01/16/2016    0.00993439           
 01/17/2016    0.00993439           
 01/18/2016    0.00993439           
 01/19/2016    0.00993439           
 01/20/2016    0.00993439           
 01/21/2016    0.00993439           
 01/22/2016    0.00993434           
 01/23/2016    0.00993434           
 01/24/2016    0.00993434           
 01/25/2016    0.00993434           
 01/26/2016    0.00993434           
 01/27/2016    0.00993434           
 01/28/2016    0.00993434           
 01/29/2016    0.00993140    0.00000296    0.0032674 
 01/30/2016    0.00993140           
 01/31/2016    0.00993140           
 02/01/2016    0.00993140           
 02/02/2016    0.00993140           
 02/03/2016    0.00993140           
 02/04/2016    0.00993140           
 02/05/2016    0.00993140           
 02/06/2016    0.00993140           
 02/07/2016    0.00993140           
 02/08/2016    0.00993140           
 02/09/2016    0.00993140           
 02/10/2016    0.00993136           
 02/11/2016    0.00993136           
 02/12/2016    0.00993134           
 02/13/2016    0.00993134           
 02/14/2016    0.00993134           
 02/15/2016    0.00993134           
 02/16/2016    0.00993134           
 02/17/2016    0.00993134           
 02/18/2016    0.00993134           
 02/19/2016    0.00993134           

 

 2 
 

 

VanEck Merk Gold Trust 2016 Gross Proceeds File

 

Date   Gold Ounces
Per Share		   Per Share Gold
Ounces Sold To
Cover Expenses		   Proceeds Per
Share		 
 02/20/2016    0.00993134           
 02/21/2016    0.00993134           
 02/22/2016    0.00993134           
 02/23/2016    0.00993134           
 02/24/2016    0.00993134           
 02/25/2016    0.00993134           
 02/26/2016    0.00993134           
 02/27/2016    0.00993134           
 02/28/2016    0.00993134           
 02/29/2016    0.00993134    0.00000301    0.00368534 
 03/01/2016    0.00992835           
 03/02/2016    0.00992835           
 03/03/2016    0.00992835           
 03/04/2016    0.00992835           
 03/05/2016    0.00992835           
 03/06/2016    0.00992835           
 03/07/2016    0.00992835           
 03/08/2016    0.00992835           
 03/09/2016    0.00992835           
 03/10/2016    0.00992835           
 03/11/2016    0.00992835           
 03/12/2016    0.00992835           
 03/13/2016    0.00992835           
 03/14/2016    0.00992835           
 03/15/2016    0.00992835           
 03/16/2016    0.00992835           
 03/17/2016    0.00992835           
 03/18/2016    0.00992835           
 03/19/2016    0.00992835           
 03/20/2016    0.00992835           
 03/21/2016    0.00992835           
 03/22/2016    0.00992835           
 03/23/2016    0.00992835           
 03/24/2016    0.00992835           
 03/25/2016    0.00992835           
 03/26/2016    0.00992835           
 03/27/2016    0.00992835           
 03/28/2016    0.00992835           
 03/29/2016    0.00992835           
 03/30/2016    0.00992835           
 03/31/2016    0.00992835    0.00000341    0.00418974 
 04/01/2016    0.00992497           
 04/02/2016    0.00992497           
 04/03/2016    0.00992497           
 04/04/2016    0.00992497           
 04/05/2016    0.00992497           
 04/06/2016    0.00992497           
 04/07/2016    0.00992497           
 04/08/2016    0.00992497           
 04/09/2016    0.00992497           
 04/10/2016    0.00992497           

 

 3 
 

 

VanEck Merk Gold Trust 2016 Gross Proceeds File

 

Date   Gold Ounces
Per Share		   Per Share Gold
Ounces Sold To
Cover Expenses		   Proceeds Per
Share		 
 04/11/2016    0.00992497           
 04/12/2016    0.00992494           
 04/13/2016    0.00992494           
 04/14/2016    0.00992490           
 04/15/2016    0.00992490           
 04/16/2016    0.00992490           
 04/17/2016    0.00992490           
 04/18/2016    0.00992490           
 04/19/2016    0.00992490           
 04/20/2016    0.00992490           
 04/21/2016    0.00992490           
 04/22/2016    0.00992490           
 04/23/2016    0.00992490           
 04/24/2016    0.00992490           
 04/25/2016    0.00992490           
 04/26/2016    0.00992490           
 04/27/2016    0.00992490           
 04/28/2016    0.00992490           
 04/29/2016    0.00992183    0.00000309    0.00394109 
 04/30/2016    0.00992183           
 05/01/2016    0.00992183           
 05/02/2016    0.00992183           
 05/03/2016    0.00992183           
 05/04/2016    0.00992182           
 05/05/2016    0.00992182           
 05/06/2016    0.00992182           
 05/07/2016    0.00992182           
 05/08/2016    0.00992182           
 05/09/2016    0.00992182           
 05/10/2016    0.00992182           
 05/11/2016    0.00992182           
 05/12/2016    0.00992182           
 05/13/2016    0.00992182           
 05/14/2016    0.00992182           
 05/15/2016    0.00992182           
 05/16/2016    0.00992182           
 05/17/2016    0.00992182           
 05/18/2016    0.00992182           
 05/19/2016    0.00992177           
 05/20/2016    0.00992177           
 05/21/2016    0.00992177           
 05/22/2016    0.00992177           
 05/23/2016    0.00992177           
 05/24/2016    0.00992177           
 05/25/2016    0.00992125           
 05/26/2016    0.00992125           
 05/27/2016    0.00992125           
 05/28/2016    0.00992125           
 05/29/2016    0.00992125           
 05/30/2016    0.00992125           
 05/31/2016    0.00992125    0.00000290    0.00348649 

 

 4 
 

 

VanEck Merk Gold Trust 2016 Gross Proceeds File

 

Date   Gold Ounces
Per Share		   Per Share Gold
Ounces Sold To
Cover Expenses		   Proceeds Per
Share		 
 06/01/2016    0.00991837           
 06/02/2016    0.00991837           
 06/03/2016    0.00991837           
 06/04/2016    0.00991837           
 06/05/2016    0.00991837           
 06/06/2016    0.00991837           
 06/07/2016    0.00991837           
 06/08/2016    0.00991837           
 06/09/2016    0.00991837           
 06/10/2016    0.00991837           
 06/11/2016    0.00991837           
 06/12/2016    0.00991837           
 06/13/2016    0.00991837           
 06/14/2016    0.00991837           
 06/15/2016    0.00991837           
 06/16/2016    0.00991837           
 06/17/2016    0.00991837           
 06/18/2016    0.00991837           
 06/19/2016    0.00991837           
 06/20/2016    0.00991837           
 06/21/2016    0.00991837           
 06/22/2016    0.00991832           
 06/23/2016    0.00991832           
 06/24/2016    0.00991832           
 06/25/2016    0.00991832           
 06/26/2016    0.00991832           
 06/27/2016    0.00991832           
 06/28/2016    0.00991832           
 06/29/2016    0.00991832           
 06/30/2016    0.00991832    0.00000310    0.00405642 
 07/01/2016    0.00991525           
 07/02/2016    0.00991525           
 07/03/2016    0.00991525           
 07/04/2016    0.00991525           
 07/05/2016    0.00991525           
 07/06/2016    0.00991525           
 07/07/2016    0.00991525           
 07/08/2016    0.00991525           
 07/09/2016    0.00991525           
 07/10/2016    0.00991525           
 07/11/2016    0.00991525           
 07/12/2016    0.00991525           
 07/13/2016    0.00991525           
 07/14/2016    0.00991525           
 07/15/2016    0.00991525           
 07/16/2016    0.00991525           
 07/17/2016    0.00991525           
 07/18/2016    0.00991525           
 07/19/2016    0.00991522           
 07/20/2016    0.00991522           
 07/21/2016    0.00991522           

 

 5 
 

 

VanEck Merk Gold Trust 2016 Gross Proceeds File

 

Date   Gold Ounces
Per Share		   Per Share Gold
Ounces Sold To
Cover Expenses		   Proceeds Per
Share		 
 07/22/2016    0.00991522           
 07/23/2016    0.00991522           
 07/24/2016    0.00991522           
 07/25/2016    0.00991522           
 07/26/2016    0.00991522           
 07/27/2016    0.00991522           
 07/28/2016    0.00991522           
 07/29/2016    0.00991192    0.00000333    0.0044331 
 07/30/2016    0.00991192           
 07/31/2016    0.00991192           
 08/01/2016    0.00991192           
 08/02/2016    0.00991192           
 08/03/2016    0.00991191           
 08/04/2016    0.00991191           
 08/05/2016    0.00991191           
 08/06/2016    0.00991191           
 08/07/2016    0.00991191           
 08/08/2016    0.00991191           
 08/09/2016    0.00991191           
 08/10/2016    0.00991191           
 08/11/2016    0.00991191           
 08/12/2016    0.00991191           
 08/13/2016    0.00991191           
 08/14/2016    0.00991191           
 08/15/2016    0.00991191           
 08/16/2016    0.00991191           
 08/17/2016    0.00991191           
 08/18/2016    0.00991191           
 08/19/2016    0.00991191           
 08/20/2016    0.00991191           
 08/21/2016    0.00991191           
 08/22/2016    0.00991191           
 08/23/2016    0.00991187           
 08/24/2016    0.00991187           
 08/25/2016    0.00991187           
 08/26/2016    0.00991187           
 08/27/2016    0.00991187           
 08/28/2016    0.00991187           
 08/29/2016    0.00991187           
 08/30/2016    0.00991187           
 08/31/2016    0.00991187    0.00000343    0.00444823 
 09/01/2016    0.00990848           
 09/02/2016    0.00990848           
 09/03/2016    0.00990848           
 09/04/2016    0.00990848           
 09/05/2016    0.00990848           
 09/06/2016    0.00990848           
 09/07/2016    0.00990848           
 09/08/2016    0.00990848           
 09/09/2016    0.00990848           
 09/10/2016    0.00990848           

 

 6 
 

 

VanEck Merk Gold Trust 2016 Gross Proceeds File

 

Date   Gold Ounces
Per Share		   Per Share Gold
Ounces Sold To
Cover Expenses		   Proceeds Per
Share		 
 09/11/2016    0.00990848           
 09/12/2016    0.00990848           
 09/13/2016    0.00990848           
 09/14/2016    0.00990848           
 09/15/2016    0.00990848           
 09/16/2016    0.00990848           
 09/17/2016    0.00990848           
 09/18/2016    0.00990848           
 09/19/2016    0.00990848           
 09/20/2016    0.00990848           
 09/21/2016    0.00990848           
 09/22/2016    0.00990848           
 09/23/2016    0.00990848           
 09/24/2016    0.00990848           
 09/25/2016    0.00990848           
 09/26/2016    0.00990848           
 09/27/2016    0.00990848           
 09/28/2016    0.00990848           
 09/29/2016    0.00990848           
 09/30/2016    0.00990848    0.00000351    0.00459204 
 10/01/2016    0.00990848           
 10/02/2016    0.00990848           
 10/03/2016    0.00990501           
 10/04/2016    0.00990501           
 10/05/2016    0.00990500           
 10/06/2016    0.00990500           
 10/07/2016    0.00990500           
 10/08/2016    0.00990500           
 10/09/2016    0.00990500           
 10/10/2016    0.00990500           
 10/11/2016    0.00990500           
 10/12/2016    0.00990500           
 10/13/2016    0.00990500           
 10/14/2016    0.00990500           
 10/15/2016    0.00990500           
 10/16/2016    0.00990500           
 10/17/2016    0.00990500           
 10/18/2016    0.00990500           
 10/19/2016    0.00990500           
 10/20/2016    0.00990500           
 10/21/2016    0.00990500           
 10/22/2016    0.00990500           
 10/23/2016    0.00990500           
 10/24/2016    0.00990500           
 10/25/2016    0.00990500           
 10/26/2016    0.00990496           
 10/27/2016    0.00990496           
 10/28/2016    0.00990496           
 10/29/2016    0.00990496           
 10/30/2016    0.00990496           
 10/31/2016    0.00990188    0.00000311    0.00391691 

 

 7 
 

 

VanEck Merk Gold Trust 2016 Gross Proceeds File

 

Date   Gold Ounces
Per Share		   Per Share Gold
Ounces Sold To
Cover Expenses		   Proceeds Per
Share		 
 11/01/2016    0.00990188           
 11/02/2016    0.00990188           
 11/03/2016    0.00990188           
 11/04/2016    0.00990188           
 11/05/2016    0.00990188           
 11/06/2016    0.00990188           
 11/07/2016    0.00990188           
 11/08/2016    0.00990188           
 11/09/2016    0.00990188           
 11/10/2016    0.00990186           
 11/11/2016    0.00990186           
 11/12/2016    0.00990186           
 11/13/2016    0.00990186           
 11/14/2016    0.00990186           
 11/15/2016    0.00990186           
 11/16/2016    0.00990186           
 11/17/2016    0.00990186           
 11/18/2016    0.00990186           
 11/19/2016    0.00990186           
 11/20/2016    0.00990186           
 11/21/2016    0.00990186           
 11/22/2016    0.00990186           
 11/23/2016    0.00990186           
 11/24/2016    0.00990186           
 11/25/2016    0.00990186           
 11/26/2016    0.00990186           
 11/27/2016    0.00990186           
 11/28/2016    0.00990186           
 11/29/2016    0.00990186           
 11/30/2016    0.00990186    0.00000343    0.00400073 
 12/01/2016    0.00989846           
 12/02/2016    0.00989849           
 12/03/2016    0.00989849           
 12/04/2016    0.00989849           
 12/05/2016    0.00989849           
 12/06/2016    0.00989849           
 12/07/2016    0.00989849           
 12/08/2016    0.00989849           
 12/09/2016    0.00989849           
 12/10/2016    0.00989849           
 12/11/2016    0.00989849           
 12/12/2016    0.00989849           
 12/13/2016    0.00989849           
 12/14/2016    0.00989849           
 12/15/2016    0.00989849           
 12/16/2016    0.00989855           
 12/17/2016    0.00989855           
 12/18/2016    0.00989855           
 12/19/2016    0.00989855           
 12/20/2016    0.00989855           
 12/21/2016    0.00989855           

 

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VanEck Merk Gold Trust 2016 Gross Proceeds File

 

Date   Gold Ounces
Per Share		   Per Share Gold
Ounces Sold To
Cover Expenses		   Proceeds Per
Share		 
 12/22/2016    0.00989855           
 12/23/2016    0.00989855           
 12/24/2016    0.00989855           
 12/25/2016    0.00989855           
 12/26/2016    0.00989855           
 12/27/2016    0.00989868           
 12/28/2016    0.00989868           
 12/29/2016    0.00989868           
 12/30/2016    0.00989868    0.00000388    0.00444920 
 12/31/2016    0.00989868           
      Totals    0.00003916    0.04846669 

 

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VanEck Merk Gold Trust Gross Proceeds and Expense Files show gold ounces acquired per VanEck Merk Gold Trust (OUNZ) share purchased, gold sold (in ounces), proceeds, and expenses per VanEck Merk Gold Trust (OUNZ) Share. You can use this information to calculate your share of OUNZ expenses, and your gain or loss on sale of gold to pay such expenses.

 

Example: Shareholder XYZ purchases 200 OUNZ shares on 02/24/2016 at a price of $50 per share for a total purchase price of $10,000. Shareholder XYZ had no other purchases or sales of OUNZ shares during 2016.

 

Step 1: Identify the shareholder’s pro rata ownership of gold (in ounces).

 

Identify Shareholder XYZ’s purchase date of 02/24/2016. In the column labeled “Gold Ounces per Share," identify the pro rata amount of gold (i.e. 0.00993134 ounces per share) each OUNZ share represents on that date.

 

For Shareholder XYZ, total prorated amount of gold ounces owned for its 02/24/2016 purchase is 1.98627 ounces (0.00993134 ozs per share multiplied by 200 shares purchased on 02/24/2016.) Note: This step should be completed for each date on which OUNZ shares were purchased.

 

Step 2: Calculate the gold (in ounces) sold from the shareholder’s account during 2016

 

The gold ounces sold per share during 2016 includes the cumulative amounts of all gold sales for the period which includes the day after the purchase date of 02/24/2016 through the day of the sale date.

 

During 2016 the amount of gold sold after the 02/24/2016 purchase date is 0.00003620 oz per share for a total of 0.00724 oz (based on the purchase of 200 shares).

 

Step 3: Calculate cost of gold sold from shareholder’s account

 

  Total Gold ozs sold (Step 2) 0.00724 oz X $ 10,000
  Gold ozs acquired (Step1) 1.98627 oz  
       
  Cost of Gold sold $ 36.45  

 

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Step 4: Calculate shareholder’s gain or loss on sales of gold for each lot purchased

 

Identify all proceeds per share received by the Trust after Shareholder XYZ’s 02/24/2016 purchase date. During 2016, there were sales at the end of every month for the period 2/25/2016 through 12/31/2016 which generated proceeds per share of $0.04519929. Therefore, Shareholder XYZ’s gain or loss is determined as follows:

 

  Total Proceeds: $0.04519929 per share X 200 shares  $9.04 
  Less: Total cost of gold sold (Step 3)   36.45 
  Total Reportable Loss  $27.41 

(1040 Sch D, Part I)

 

Step 5: Calculate shareholder’s investment expenses

 

Identify all expenses per share paid by the Trust after Shareholder XYZ’s 02/24/2016 purchase date. During 2016, the expenses paid were at the end of every month for the period of 02/24/2016 through 12/31/2016 which amounted to $0.04519929 per share. Therefore, Shareholder XYZ’s investment expenses are:

 

  Investment Expenses per Share  $0.04519929 
  Total Shares   200 
  Total Expense  $9.04 

(1040 Sch A)

 

Step 6: Calculate shareholder’s adjusted gold held and cost basis

 

  Gold ounces Purchased on 02/24/2016 (Step 1)   1.98627 oz 
  Less: Gold ounces sold during 2016 (Step 2)   0.00724 oz 
  Adjusted Shareholder’s Gold ounces at 12/31/2016   1.97903 oz 
        
  Original Purchase Cost on 02/24/2016  $10,000.00 
  Less: Cost of Gold Sold during 2016 (Step 3)   36.45 
  Adjusted Shareholder’s basis at 12/31/2016  $9,963.55 

 

Shareholder’s adjusted gold ounces and adjusted cost calculated in Step 6 are his/her adjusted ounces of gold and adjusted basis for the 02/24/2016 purchase at the end of 12/31/2016.

 

Shareholders with several purchases should calculate gain, loss and adjusted basis separately for each purchased lot and then sum up the results of each lot to arrive at the net reportable gain or loss and the total investment expenses. Shareholders who purchased their shares prior to 2016, and made no other purchases, should calculate their adjusted cost basis, using the gross proceeds information for the relevant years, by following the same steps as in the example above. The adjusted cost basis at 12/31/2015 should be used as the beginning cost for 2016 instead of original purchase cost. Shareholders with an additional purchase in 2016 will have two cost lots to account for in 2016. The calculation of gains and losses will be affected by the cost basis method used to account for the sales.

 

 

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