True Energy Trust Announces 2006 Canadian and US Tax Information



    TSX: TUI.UN

    CALGARY, March 7 /CNW/ - True Energy Trust ("True" or the "Trust"), is
pleased to provide Canadian and US tax information for 2006.

    Canadian Income Tax Information

    The following information is intended to assist individual Canadian
unitholders of True in the preparation of their 2006 T1 Income Tax Return.
    Cash distributions in 2006 are 77% taxable and 23% return of capital.

    Trust units held within an RRSP, RRIF or DPSP

    No amounts are required to be reported on the 2006 T1 Income Tax Return
where Trust units are held within an RRSP, RRIF or DPSP.

    Trust units held outside 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 2006 calendar year, will receive a "T3 Supplementary"
slip directly from their broker or intermediary, not from the transfer agent
of the Trust, Computershare Investor Services (the "Transfer Agent"), or the
Trust.
    Registered Unitholders of Trust Units who have received cash
distributions for the 2006 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 2006 Income
Tax Return. Accordingly, the taxable amount of cash distributions received and
receivable for the period from January 1, 2006 up to and including December
31, 2006 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 the Income Tax Act is March 31, 2007.

    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 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.

    U.S. Income Tax Information

    The following information is being provided to assist U.S. individual
unitholders of True Energy Trust in reporting distributions received from True
during 2006 on their Internal Revenue Service ("IRS") Form 1040, "U.S.
Individual Income Tax Return" ("Form 1040").
    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 True trust
units. Holders or potential holders of True trust units should consult their
own legal and tax advisors as to their particular tax consequences of holding
True trust units.

    Qualified Dividends

    In consultation with its U.S. tax advisors, True 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 2006 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.

    
         True 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, 79.5% percent should be reported as "qualified
dividends" and 20.5% 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 23 of the Form
1040 Instruction Booklet for 2006 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 payable.
    The taxable portion (for Canadian income tax purposes) of the
distributions is subject to a 15% Canadian withholding tax that is withheld
prior to any payments being distributed to unitholders. Beginning in 2005, the
return of capital portion (for Canadian income tax purposes) of the
distributions is also subject to a 15% 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 all withholding tax should be
creditable, subject to numerous limitations, for U.S. tax purposes in the year
in which the withholding taxes are withheld. Where trust units are held in
qualified retirement account, the same withholding taxes apply 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 2006 should be determined from your own
records and is not available from True. 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.
    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 True 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. True 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 True trust
units are held within a qualified retirement plan.

    %SEDAR: 00021401E




For further information:

For further information: Paul Baay, President and CEO, (403) 750-1272;
Edward Brown, Vice President, Finance and CFO, (403) 750-2655; Scott Koyich,
Investor Relations,(403) 750-2428; Troy Winsor, Investor Relations, (800)
663-8072


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