Taxes 2009
On July 9, 2009, Advantage Energy Income Fund ("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 conversion is tax deferred for Canadian residents and a taxable event for a U.S. taxpayer. The Fund discontinued cash distributions with the final cash distribution paid to Unitholders on March 16, 2009.
This summary is of a general nature only. A former Unitholder should consult with their own tax advisor for advice with respect to the tax consequences to it in its particular circumstances.
For more detailed tax information related to the trust conversion, Unitholders should refer to pages 14 to 20 in the Information Circular dated June 5, 2009. Information Circular please click here
U.S. Unitholders please click here
Canadian Unitholders Income 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 are comprised of a return of capital portion (non-taxable) and other income (taxable). The following schedules include supplementary information on the taxable portion of cash distributions shown on a per Trust Unit basis.
Cash distributions in 2009 are 100% taxable to former Unitholders.
Record Date |
Payment Date |
Distribution |
Taxable Amount |
Return of Capital Amount |
| February 27 | March 16 | $0.04 | $0.04 | $0.00 |
| January 30 | February 17 | $0.08 | $0.08 | $0.00 |
 |
||||
| Total | $0.12 | $0.12 | $0.00 | |
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 have 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 Candadian residents and will not result in 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 intial 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.