The 60/40 formula gives you a blended tax rate very close to the 28% rate on collectibles. The PowerShares DB Commodity Index Tracking Fund (DBC), U.S. Oil (USO) and other funds like them are partnerships. Let's say you lost $1 million investing in a shopping mall, and are now making $100,000 a year off a commodity fund organized as a partnership. The erasing mechanism converts capital gains into high-taxed ordinary income, and it causes net capital losses for any year to vanish into the ether. You can use the capital loss to shelter only $3,000 a year of your commodity profits.

Source: Forbes June 13, 2017 13:41 UTC