Canetic Resources Trust Provides 2006 US Tax Information



    CALGARY, March 6 /CNW/ - Canetic Resources Trust ("Canetic" or the
"Trust") is pleased to provide the following information to assist individual
U.S. unitholders in reporting distributions received from Canetic on their IRS
form 1040 - U.S. Individual Income Tax Return for the 2006 calendar year.

    The information contained herein is of a general nature only and not
exhaustive of all possible U.S. tax considerations. It is not intended to
constitute legal or tax advice to any holder or potential holder of Canetic
trust units. Readers should consult their own legal or tax advisors as to
their particular tax consequences of holding Canetic trust units.

    Canetic Units Within a Qualified Retirement Plan
    ------------------------------------------------

    No amounts are required to be reported on an IRS Form 1040 - U.S.
Individual Income Tax Return if Canetic trust units are held within a
qualified retirement plan.

    Canetic Units Held Outside a Qualified Retirement Plan
    ------------------------------------------------------

    Canetic should be treated as a corporation and its units as equity under
U.S. tax law. Therefore, a portion of the Trust's distributions paid during
the year should be considered dividends for U.S. federal income tax purposes.
Canetic has determined that 100% of distributions paid during 2006 should be
reported as a "qualified dividend" and that no portion of the distributions
should be reported as a tax-deferred return of capital.
    In consultation with its U.S. tax advisors, Canetic is of the opinion
that the dividend portion of the 2006 distributions should be considered
"Qualified Dividends" under the Jobs and Growth Tax Relief Reconciliation Act
of 2003. Such Qualified Dividends are eligible for the reduced tax rate
applicable to long-term capital gains and are to be reported on line 9(b) of
the Federal income tax return. There are certain individual circumstances, as
provided on page 23 of the IRS 2006 1040 Instruction Booklet, where the
dividends may not be Qualified Dividends (such as in situations where the
individual unitholder does not meet a holding period test). Where these
circumstances apply, they are to be reported as Ordinary Dividends on Schedule
B - Part II and line 9(a) of the Federal income tax return.
    U.S. individual unitholders who hold their Canetic units through a broker
or other intermediary should receive tax reporting information from the broker
or intermediary. We expect the broker or intermediary will issue a 1099-DIV
"Dividends and Distributions" or a similar substitute form. We have every
reason to believe that Canetic dividends should appear as "Qualified
Dividends" on Line 1(b) of the 1099-DIV forms received for 2006 since the
Trust has undertaken measures to ensure it has been included as a "qualified
foreign corporation" on a database established and maintained by several U.S.
brokerage firms. Registered unitholders will receive form 1099-DIV directly
from Canetic's transfer agent.

    Unitholders are strongly encouraged to compare the 1099-DIV form received
from their broker to the information provided in this press release, noting in
particular that the dividend amount is correctly identified as a "Qualified
Dividend". Investors should consult their brokers and tax advisors to ensure
the proper information is accurately reflected on their tax returns.

    Unitholders are encouraged to utilize the Qualified Dividends and Capital
Gain Worksheet to determine the amount of tax that may otherwise be payable.
    Pursuant to the Canada - U.S. Tax Treaty, Canetic distributions paid to
residents of the United States are subject to a 15% withholding tax on 100% of
the gross distribution.
    Based on an opinion we have received from our U.S. tax advisors, for
units held in taxable accounts, we believe the full amount of Canadian
withholding taxes applied to Canetic distributions should be creditable for
U.S. tax purposes in the taxation year in which it is applied. Where units are
held in a tax-deferred account (e.g., an IRA account), no portion of the
withholding tax is creditable.
    All Canadian withholding taxes that have been withheld from your
distributions should be reported on Form 1116 "Foreign Tax Credit (Individual,
Estate or Trust)". Information regarding the amount of Canadian tax withheld
from 2006 distributions should be available through your broker or other
intermediary and is not available from Canetic.

    2006 Summary of U.S. Tax Information
    ------------------------------------

    The following schedules summarize, on a per unit basis, the U.S. tax
treatment of monthly cash distributions paid by Canetic (prior to Canadian
withholding tax) for the period January 1st to December 31st, 2006. The
amounts are expressed in $ U.S. converted on the date of payment.
    Please note the first payment made by Canetic in 2006 (i.e., paid on or
about Jan 13, 2006) was in respect of distributions declared in predecessor
Acclaim Energy Trust ("Acclaim") or StarPoint Energy Trust ("StarPoint") prior
to the merger and therefore, the appropriate table to use below will be
dependent on whether you held Acclaim or StarPoint units immediately prior to
the merger which created Canetic on January 5, 2006.

    
                     2006 CASH DISTRIBUTION INFORMATION
               FOR FORMER ACCLAIM UNITHOLDERS ($/CANETIC UNIT)
    -------------------------------------------------------------------------

                                Cash
                               Distri-                                  Tax-
                               bution                                Deferred
                                per                Cash      Taxable  Return
                              Canetic  Conver-    Distri-  Qualified    of
                   Payment      Unit    sion      bution    Dividend  Capital
    Record Date      Date      ($Cdn)  Rate(1)    ($U.S.)    ($U.S.)  ($U.S.)
    -------------------------------------------------------------------------
    Dec 30 2005  Jan 13, 2006  0.1950   0.8611   0.167915   0.167915    Nil
    Jan 31 2006  Feb 15 2006   0.2300   0.8665   0.199295   0.199295    Nil
    Feb 28 2006  Mar 15 2006   0.2300   0.8656   0.199088   0.199088    Nil
    Mar 31 2006  Apr 13 2006   0.2300   0.8681   0.199663   0.199663    Nil
    Apr 28 2006  May 15 2006   0.2300   0.8977   0.206471   0.206471    Nil
    May 31 2006  Jun 15 2006   0.2300   0.8947   0.205781   0.205781    Nil
    Jun 30 2006  Jul 14 2006   0.2300   0.8870   0.204010   0.204010    Nil
    Jul 31 2006  Aug 15 2006   0.2300   0.8912   0.204976   0.204976    Nil
    Aug 31 2006  Sep 15 2006   0.2300   0.8933   0.205459   0.205459    Nil
    Sep 29 2006  Oct 13 2006   0.2300   0.8797   0.202331   0.202331    Nil
    Oct 31 2006  Nov 15 2006   0.2300   0.8780   0.201940   0.201940    Nil
    Nov 30 2006  Dec 15 2006   0.2300   0.8640   0.198720   0.198720    Nil
                               ------            ----------------------------
    TOTAL                      $2.725             $2.396     $2.396     Nil
                               ------            ----------------------------
                               ------            ----------------------------

    (1) Bank of Canada noon rate on date of payment


                     2006 CASH DISTRIBUTION INFORMATION
              FOR FORMER STARPOINT UNITHOLDERS ($/CANETIC UNIT)
    -------------------------------------------------------------------------

                                Cash
                               Distri-                                  Tax-
                               bution                                Deferred
                                per                Cash      Taxable  Return
                              Canetic  Conver-    Distri-  Qualified    of
                   Payment      Unit    sion      bution    Dividend  Capital
    Record Date      Date      ($Cdn)  Rate(1)    ($U.S.)    ($U.S.)  ($U.S.)
    -------------------------------------------------------------------------
    Dec 31 2005  Jan 13, 2006  0.2200   0.8611   0.189442   0.189442    Nil
    Jan 31 2006  Feb 15 2006   0.2300   0.8665   0.199295   0.199295    Nil
    Feb 28 2006  Mar 15 2006   0.2300   0.8656   0.199088   0.199088    Nil
    Mar 31 2006  Apr 13 2006   0.2300   0.8681   0.199663   0.199663    Nil
    Apr 28 2006  May 15 2006   0.2300   0.8977   0.206471   0.206471    Nil
    May 31 2006  Jun 15 2006   0.2300   0.8947   0.205781   0.205781    Nil
    Jun 30 2006  Jul 14 2006   0.2300   0.8870   0.204010   0.204010    Nil
    Jul 31 2006  Aug 15 2006   0.2300   0.8912   0.204976   0.204976    Nil
    Aug 31 2006  Sep 15 2006   0.2300   0.8933   0.205459   0.205459    Nil
    Sep 29 2006  Oct 13 2006   0.2300   0.8797   0.202331   0.202331    Nil
    Oct 31 2006  Nov 15 2006   0.2300   0.8780   0.201940   0.201940    Nil
    Nov 30 2006  Dec 15 2006   0.2300   0.8640   0.198720   0.198720    Nil
                               ------            ----------------------------
    TOTAL                       $2.75             $2.417     $2.417     Nil
                               ------            ----------------------------
                               ------            ----------------------------

    (1) Bank of Canada noon rate on date of payment
    

    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.





For further information:

For further information: please see the website at www.canetictrust.com;
or contact Canetic investor relations by email at: Info@canetictrust.com, or
toll free telephone at 1-877-539-6300

Organization Profile

CANETIC RESOURCES TRUST

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890