Canetic Resources Trust releases 2006 US tax reporting information
January 15 2007 - 9:53PM
PR Newswire (US)
CALGARY, Jan. 15 /PRNewswire-FirstCall/ -- (CNE.UN - TSX; CNE -
NYSE) - Canetic Resources Trust ("Canetic") today released
information necessary for 2006 United States ("U.S.") unitholder
tax reporting. We believe that for U.S. Federal income tax
purposes, the units of Canetic more likely than not will be
properly classified as equity in a corporation, rather than debt,
and that distributions paid to its individual U.S. unitholders will
be "Qualified Dividends" under the Jobs and Growth Tax Relief
Reconciliation Act of 2003. There are certain circumstances where
the distributions may not be Qualified Dividends (such as
situations where individual unitholders do not meet a holding
period test). As such, the portion of the distributions made during
2006 that are considered dividends should qualify for the reduced
rate of tax applicable to certain capital gains with respect to
eligible unitholders. The portion of Canetic's trust distributions
that is considered a dividend for U.S. Federal income tax purposes
is determined based upon the greater of Canetic's current or
accumulated earnings and profits ("E&P") as determined in
accordance with U.S. Federal income tax principles. Canetic is
currently in the process of calculating its E&P under U.S. tax
law. With respect to cash distributions paid in 2006 to U.S.
individual unitholders, the percentage to be reported as a taxable
qualified dividend and the percentage to be reported as a
non-taxable return-of-capital distribution will be available upon
completion of the E&P calculations and, in any case, before
February 28, 2007. Another press release will be made at that time
which will report this information. The press release will be made
available on Canetic's website at http://www.canetictrust.com/.
U.S. unitholders who hold their Canetic units through a broker or
other intermediary should receive tax reporting information
directly from the broker or intermediary. We expect the broker or
intermediary will issue a Form 1099-DIV "Dividends and
Distributions" or a similar substitute form. Registered unitholders
will receive a Form 1099-DIV directly from Canetic's transfer agent
prior to January 31, 2007. We have every reason to believe the
Canetic dividends should appear as "Qualified Dividends" on line
1(b) of the Form 1099-DIV for 2006 since the Trust has taken
measures to ensure it has been included as a "qualified foreign
corporation" on a database established and maintained by several
U.S. brokerage firms. Unitholders are encouraged to check their
Form 1099-DIV to ensure the dividend amount is correctly identified
as a "Qualified Dividend". The content of this press release has no
impact on Canadian resident taxpayers. Canetic is one of Canada's
largest oil and gas royalty trusts. Canetic trust units and
debentures are listed on the Toronto Stock Exchange under the
symbols CNE.UN, CNE.DB.A, CNE.DB.B, CNE.DB.C, CNE.DB.D, and
CNE.DB.E and the trust units are listed on the New York Stock
Exchange under the symbol CNE. Additional Information Additional
information regarding the Trust and its business operations,
including the Trust's annual information form for the period ended
December 31, 2005, is available on the Trust's SEDAR company
profile at http://www.sedar.com/, the SEC's website at
http://www.sec.gov/ or Canetic's website at
http://www.canetictrust.com/. DATASOURCE: Canetic Resources Trust
CONTACT: please see the website at http://www.canetictrust.com/ or
contact Canetic investor relations by email at: or toll free
telephone at 1-877-539-6300.
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