2009 Tax Information for Advantage Energy Income Fund
03 Febbraio 2010 - 11:14PM
PR Newswire (US)
(TSX: AAV, NYSE: AAV) CALGARY, Feb. 3 /PRNewswire-FirstCall/ -- On
July 9, 2009, Advantage Energy Income Fund (the "Fund") converted
from a trust to a corporation. Unitholders of the Fund received,
for each trust unit held, one common share of Advantage Oil &
Gas Ltd. ("Advantage"). The Fund discontinued cash distributions
with the final cash distribution paid to Unitholders on March 16,
2009. The following information is being provided to assist former
individual Unitholders of the Fund in the preparation of their 2009
Income Tax Returns. The information contained in this news release
is of a general nature only and is based on Advantage's
understanding of the Income Tax Act (Canada) and the United States
Internal Revenue Code. It is not intended to be, nor should it be
construed to be, legal or tax advice to any particular former
Unitholder. Former Unitholders should consult their own tax
advisors with respect to their particular circumstances. 2009
Canadian Tax Information The following information is intended to
assist former individual Canadian Unitholders of the Fund in the
preparation of their 2009 T1 Income Tax Return. Cash distributions
in 2009 are 100% taxable to former Unitholders. Trust Units held
within an RRSP, RRIF, or DPSP No distribution amounts are required
to be reported on the 2009 T1 Income Tax Return where Trust Units
were held within an RRSP, RRIF or DPSP. Trust Units held outside of
an RRSP, RRIF or DPSP Unitholders who held their Trust Units
outside of an RRSP, RRIF or DPSP through a broker or other
intermediary and who received cash distributions for the 2009
calendar year, will receive a "T3 Supplementary" slip directly from
their broker or intermediary, not from the transfer agent
Computershare Investor Services (the "Transfer Agent"), the Fund,
or Advantage. Registered Unitholders of Trust Units who received
cash distributions for the 2009 calendar year from the Transfer
Agent (and not from a broker or intermediary), will receive a "T3
Supplementary" slip directly from the Transfer Agent. Under
Paragraph 12(1)(m) of the Income Tax Act, taxable amounts allocated
to the former Unitholders must be reported by the Unitholders in
their 2009 Income Tax Return. Accordingly, the taxable amount of
cash distributions received and receivable for the period from
January 1, 2009 up to and including July 9, 2009 are included in
your "T3 Supplementary" slip. The amount reported in Box (26) on
the T3 slip should be reported on your T1 Income Tax Return as
"Other Income". The deadline for mailing all T3 Supplementary
Information slips as required by Canada Revenue Agency is March 31,
2010. The conversion from a trust to a corporation is generally tax
deferred for Canadian residents and will not result in a capital
gain or loss. Adjusted Cost Base for Capital Gains Former
Unitholders are required to reduce the Adjusted Cost Base of their
Trust Units by an amount equal to the cumulative cash received and
receivable from cash distributions minus cumulative taxable amounts
reported as "Other Income" on their slips (if any). If the amount
of the reduction exceeds the Adjusted Cost Base, the excess should
be reported as a capital gain and the Adjusted Cost Base will then
be reset to zero. The Adjusted Cost Base is used in calculating
capital gains or losses on the disposition of the Trust Units if
the Trust Units were held as capital property by the owner. On
conversion from a trust to a corporation, the initial adjusted cost
base of the common shares of Advantage received by a former
Unitholder of the Fund is generally equal to the adjusted cost base
of the former Unitholder's trust units on July 9, 2009. 2009 U.S.
Tax Information The information that follows is being provided to
assist former U.S. individual Unitholders of the Fund in reporting
distributions received from the Fund on their Internal Revenue
Service ("IRS") Form 1040 - U.S. Individual Income Tax Return for
the calendar year 2009. In consultation with its U.S. tax advisors,
the Fund believes that its Trust Units should be properly
classified as equity in a corporation, rather than debt, and that
the portion of the distribution which is considered to be a
dividend for U.S. federal income tax purposes should be considered
to be a "qualified dividend". As such, the portion of the
distributions received during 2009 that are considered dividends
for U.S. federal income tax purposes should qualify for the reduced
rate of tax applicable to long-term capital gains. However, the
individual taxpayer's situation must be considered before making
this determination. The Fund and Advantage have not received an IRS
letter ruling or a tax opinion from its tax advisors on these
matters. With respect to cash distributions paid during the year to
former U.S. individual Unitholders, 100% should be reported as
"qualified dividends". The receipt of common shares, on the
conversion from a trust to a corporation, by a former United States
Unitholder will generally be a "taxable event" for United States
federal income tax purposes. A United States Unitholder will
recognize a gain or loss equal to the difference between the fair
market value of the common shares received and the Unitholder's
adjusted tax basis in the trust units surrendered. Any gain or loss
recognized by a United States Unitholder will generally be a
capital gain or loss, and will be a long-term capital gain or loss
if the United States Unitholder's holding period in the trust units
exceeds one year as of July 9, 2009. For further information of
taxability of distributions paid by the Fund, please refer to the
taxation section of our website at
http://www.advantageog.com/financial/taxes and consult your
qualified tax advisor. DATASOURCE: Advantage Oil & Gas Ltd.
CONTACT: Investor Relations, Toll free: 1-866-393-0393; Advantage
Oil & Gas Ltd., 700, 400 - 3rd Avenue SW, Calgary, Alberta, T2P
4H2, Phone: (403) 718-8000, Fax: (403) 718-8300, Web Site:
http://www.advantageog.com/, E-mail:
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