Advantage Energy Income Fund - 2007 Tax Information



    (TSX: AVN.UN, NYSE:   AAV)

    CALGARY, March 6 /CNW/ -

    
                        2007 Canadian Tax Information
    

    The following information is intended to assist individual Canadian
Unitholders of both Advantage Energy Income Fund and Sound Energy Trust (each
referred to as the "Fund") in the preparation of their 2007 T1 Income Tax
Return.
    Cash distributions in 2007 are 100% taxable to Unitholders. The change in
the taxability level of our distribution allows the preservation of tax pools
in light of the Federal Government announcement to begin taxing trusts in
2011.

    Trust Units held within an RRSP, RRIF, or DPSP

    No amounts are required to be reported on the 2007 T1 Income Tax Return
where Trust Units are held within an RRSP, RRIF or DPSP.

    Trust Units held outside of an RRSP, RRIF or DPSP

    Unitholders who hold their Trust Units outside of an RRSP, RRIF or DPSP
through a broker or other intermediary and who have received cash
distributions for the 2007 calendar year, will receive a "T3 Supplementary"
slip directly from their broker or intermediary, not from the transfer agent
of the Fund, Computershare Investor Services (the "Transfer Agent"), or the
Fund.
    Registered Unitholders of Trust Units who have received cash
distributions for the 2007 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 Unitholders must be reported by the Unitholders in their 2007 Income
Tax Return. Accordingly, the taxable amount of cash distributions received and
receivable for the period from January 1, 2007 up to and including
December 31, 2007 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, 2008.

    Adjusted Cost Base for Capital Gains

    Holders of Trust Units 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 are held as a capital
property by the owner.

    
                          2007 U.S. Tax Information
    

    The information that follows is being provided to assist 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 2007. This information is of a general nature
only and is not intended to be legal or tax advice. 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 made during 2007 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 has 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 U.S.
individual Unitholders, 100% should be reported as "qualified dividends".
    For further information of taxability of distributions paid by Advantage,
please refer to the taxation section of our website at
http://www.advantageincome.com/ir/taxes.shtml and consult your qualified tax
advisor.

    %SEDAR: 00016522E          %CIK: 0001259995




For further information:

For further information: Investor Relations, Toll free: 1-866-393-0393, 
ADVANTAGE ENERGY INCOME FUND, 700, 400 - 3RD AVENUE SW, Calgary, Alberta, T2P
5E9, Phone: (403) 718-8000, Fax: (403) 718-8300, Web Site: 
www.advantageincome.com, E-mail: advantage@advantageincome.com


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