CALGARY, March 5 /CNW/ - (TSX - MTL.UN) The Mullen Group Income Fund
("Mullen" and/or the "Fund") is pleased to provide the following information
to assist U.S. individual unitholders of Mullen Group Income Fund ("Mullen")
in reporting distributions received from Mullen during 2007 on their Internal
Revenue Service ("IRS") Form 1040, "U.S. Individual Income Tax Return" ("Form
This summary is of a general nature only and is not intended to be legal
or tax advice to any particular holder or potential holder of Mullen trust
units. Holders or potential holders of Mullen trust units should consult their
own legal and tax advisors as to their particular tax consequences of holding
Mullen trust units.
In consultation with its U.S. tax advisors, Mullen believes that its
trust units should be properly classified as equity in a corporation, rather
than debt, and that dividends paid to individual U.S. unitholders should be
"qualified dividends" for U.S. federal income tax purposes. 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.
Mullen has not received an IRS letter ruling or a tax opinion from its
tax advisors on these matters.
Trust Units Held Outside a Qualified Retirement Plan
With respect to cash distributions paid during the year to U.S.
individual unitholders, 100% percent should be reported as "qualified
dividends" and no amount should be reported as a return of capital.
The portion of the distributions treated as "qualified dividends" should
be reported on Line 9b of Form 1040, unless the fact situation of the U.S.
individual unitholder determines otherwise. Commentary on page 19 of the Form
1040 Instruction Booklet for 2007 with respect to "qualified dividends"
provides examples of individual situations where the dividends would not be
"qualified dividends". Where, due to individual situations, the dividends are
not "qualified dividends", the amount should be reported on Schedule B - Part
II - Ordinary Dividends and Line 9a of Form 1040.
U.S. unitholders are encouraged to utilize the Qualified Dividends and
Capital Gain Tax Worksheet of Form 1040 to determine the amount of tax that
may be otherwise applicable.
The taxable portion (for Canadian income tax purposes) of the
distributions is subject to a minimum 15% Canadian withholding tax that is
withheld prior to any payments being distributed to unitholders. Where trust
units are held in a cash account, we believe the full amount of the
withholding tax should be creditable, subject to numerous limitations, for
U.S. tax purposes in the year in which the withholding tax is withheld. Where
trust units are held in a qualified retirement account, the same withholding
tax applies but the amount is not creditable for U.S. tax purposes.
The amount of Canadian tax withheld should be reported on Form 1116,
"Foreign Tax Credit (Individual, Estate, or Trust)". Information regarding the
amount of Canadian tax withheld in 2007 should be determined from your own
records and is not available from Mullen. Amounts over-withheld, if any, from
Canada should be claimed as a refund from the Canada Revenue Agency no later
than two years after the calendar year in which the payment was paid, and
should not be claimed as a credit against your U.S. federal tax liability.
Investors should report their dividend income in accordance with this
information and subject to advice from their tax advisors. U.S. individual
unitholders who hold their Mullen trust units through a stockbroker or other
intermediary should receive tax reporting information from their stockbroker
or other intermediary. We expect that the stockbroker or other intermediary
will issue a Form 1099-DIV, "Dividends and Distributions" or a substitute form
developed by the stockbroker or other intermediary. Mullen is not required to
furnish such unitholders with Form 1099-DIV. Information on the Forms 1099-DIV
issued by the brokers or other intermediaries may not accurately reflect the
information in this press release for a variety of reasons. Investors should
consult their brokers and tax advisors to ensure that the information
presented here is accurately reflected on their tax returns. Brokers and/or
intermediaries may or may not be required to issue amended Forms 1099-DIV.
Trust Units Held Within a Qualified Retirement Plan
No amounts are required to be reported on a Form 1040 where Mullen trust
units are held within a qualified retirement plan.
This press release may contain forward-looking statements that are
subject to risk factors associated with the oil and gas business and the
overall economy. The Fund believes that the expectations reflected in this
press release are reasonable, but results may be affected by a variety of
variables. The Fund relies on litigation protection for "forward-looking"
Mullen is an open-ended income fund that owns a network of independently
operated businesses. Today the Mullen Group is recognized as the largest
provider of specialized transportation and related services to the oil and
natural gas industry in western Canada and as one of the leading suppliers of
trucking and logistics services in Canada - two sectors of the economy in
which the Fund has strong business relationships and industry leadership.
Administration of the Fund is delegated to Mullen Group Inc. which, in
addition to managing the Fund, provides management and financial expertise,
technology and systems support to its independent businesses.
Mullen is a publicly traded income trust listed on the Toronto Stock
Exchange under the symbol "MTL.UN". Additional information is available on our
website at www.mullen-group.com.
For further information:
For further information: Mr. David E. Olson, Vice President, Finance and
Chief Financial Officer, P.O. Box 87, 1 Maple Leaf Road, Aldersyde, Alberta,
Canada, T0L 0A0, Tel: (403) 652-8888, Fax: (403) 601-8301