Q. What is the tax breakdown of the 2006 Trust Distributions?

A. Canadian Tax Information

The tax breakdown of the distributions is as follows:
 
                                                                        Percentage     
Taxable Income (Other Income)             78.80%        
Return of Capital                                         21.20%
                                                                       100.00%
 
It should be noted that the return of capital, to the extent the units are in a taxable account, reduces the adjusted cost basis of your units.  Kindly consult your tax advisor if you require further information.
 
A. US Tax Information

Trust Units Held Outside a Qualified Retirement Plan
 
With respect to cash distributions paid during the year to U.S. individual unitholders, 18.1 percent should be reported as a return of capital (to the extent of the Unitholder’s U.S. tax basis in their respective units) and 81.9 percent should be reported as “qualified dividends”.

 

Q. What is the tax breakdown of the 2005 Trust Distributions? A. Canadian Tax Information The tax breakdown of the distributions is as follows:                                                                           Percentage      Taxable Income (Other Income)             86.05%         Return of Capital                                         13.95%                                                                        100.00%   It should be noted that the return of capital, to the extent the units are in a taxable account, reduces the adjusted cost basis of your units.  Kindly consult your tax advisor if you require further information.   A. US Tax Information Trust Units Held Outside a Qualified Retirement Plan   With respect to cash distributions paid during the year to U.S. individual unitholders, 9.3 percent should be reported as a return of capital (to the extent of the Unitholder’s U.S. tax basis in their respective units) and 90.7 percent should be reported as “qualified dividends”.

Q. Your website states % for 2004 and previous periods distributions represented Return of Capital. Does this information apply to U. S. Taxpayers? A. Prior to 2005 Bonterra had not conducted any research into the tax consequences of its distributions to U.S. unitholders and as such we cannot say whether the distributions were qualified or not for U.S. tax puposes nor what percentage would be considered a return of capital.

Q. What is the Canadian tax status of the previous years trust distributions? A. The Bonterra Energy Income Trust (BNE.UN) (Bonterra) tax breakdown of the distributions for 2004 is as follows: Percentage   Taxable Income (Other Income) 58.51%   Return of Capital 41.49%   100.00%                   For 2003 is as follows:     Percentage Taxable Income (Other Income) 68.92% Return of Capital 31.08% 100.00% For 2002 is as follows: Percentage Taxable Income (Other Income) 69.82% Return of Capital 30.18% 100.00% For 2001 old Bonterra Energy Income Trust is as follows: Percentage Taxable Income (Other Income) 64.5% Return of Capital 35.5% 100.00% For 2001 Comstate Resources Income Trust is as follows: Percentage Taxable Income (Other Income) 86.2% Return of Capital 13.8% 100.00% It should be noted that the return of capital, to the extent the units are held in a taxable account, reduces the adjusted cost base (ACB) of your units. Kindly consult your tax advisor if you require further information.

Q. When does Bonterra pay distributions? A. Bonterra's pays distributions on a monthly basis. Distributions are usually payable to unit holders of record on the 15th of each month and are paid on the last business day of each month. The exception is in December where the record date is December 31 instead of January 15th. The December distributions are still paid January 31st.   A monthly press release is issued and the Trust encourages investors to review the releases for changes to the above dates.

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