Avenir Diversified Income Trust
TSX : AVF.UN

Avenir Diversified Income Trust

February 26, 2010 13:44 ET

Avenir Diversified Income Trust 2009 Income Tax Information

CALGARY, ALBERTA--(Marketwire - Feb. 26, 2010) - Avenir Diversified Income Trust ("Avenir Trust" or the "Trust" (TSX:AVF.UN) today provides 2009 Tax information.

The information contained herein is based on Avenir Trust's understanding of the respective income tax regulations in Canada and the United States ("U.S.") and is provided for general information purposes only. Unitholders should consult their tax advisors with respect to their particular circumstances.



2009 Canadian Unitholder Tax Information

Distributions:

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Return
Distribution Capital of Taxable
Record Date Payable Date Amount/Unit Gain Capital Portion
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Regular Monthly
Distributions
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December 31, 2008 January 15, 2009 $ 0.083 $ 0.00 $ 0.00 $0.083
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January 30, 2009 February 16, 2009 $ 0.083 $ 0.00 $ 0.00 $0.083
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February 27, 2009 March 16, 2009 $ 0.083 $ 0.00 $ 0.00 $0.083
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March 31, 2009 April 15, 2009 $ 0.083 $ 0.00 $ 0.00 $0.083
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April 30, 2009 May 15, 2009 $ 0.083 $ 0.00 $ 0.00 $0.083
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May 29, 2009 June 15, 2009 $ 0.06 $ 0.00 $ 0.00 $ 0.06
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June 30, 2009 July 15, 2009 $ 0.06 $ 0.00 $ 0.00 $ 0.06
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July 31, 2009 August 17, 2009 $ 0.06 $ 0.00 $ 0.00 $ 0.06
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August 31, 2009 September 15, 2009 $ 0.06 $ 0.00 $ 0.00 $ 0.06
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September 30, 2009 October 15, 2009 $ 0.06 $ 0.00 $ 0.00 $ 0.06
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October 30, 2009 November 16, 2009 $ 0.06 $ 0.00 $ 0.00 $ 0.06
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November 30, 2009 December 15, 2009 $ 0.06 $ 0.00 $ 0.00 $ 0.06
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Total 2009
Distributions $ 0.835 $ 0.00 $0.00 $0.835
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The regular monthly calculations have been completed on a cash basis, and therefore include the distributions declared by the Trust in December 2008 payable January 15, 2009, up to and including the November 2009 distribution payable December 15, 2009. Regular monthly distributions declared for this period totalled $0.835.

Regular Monthly Distributions

Avenir Trust has determined that for Canadian Unitholders, regular monthly distributions paid in 2009 are 100% taxable with no tax deferred return of capital (ROC).

Canadian Unitholders holding their Avenir Trust investment in a Registered Retirement Savings Plan, Registered Retirement Income Fund or Deferred Profit Savings Plan should not report any income related to distributions on their 2009 income tax return. Unitholders holding their units outside such plans will receive a T3 Supplementary Information slip (T3), directly from their brokerage firm or intermediary, not from the transfer agent or Trust. Avenir Trust's Canadian registered Unitholders who received cash distributions during the period from the transfer agent, Olympia Trust Company of Canada, will receive "T3 Supplementary" slips directly from Olympia Trust Company of Canada (and not from a brokerage firm or intermediary). While Olympia Trust Company of Canada will strive to issue these information slips as soon as possible, the deadline for mailing all T3 Supplementary Information slips as required by Canada Revenue Agency is March 31, 2010. Unitholders are to report the taxable portion of distributions as "other income" on their 2009 income tax return.



2009 U.S. Unitholder Tax Information

Distributions:

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Distribution
Record Date Payable Date Amount/Unit
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(1) Regular Monthly Distributions
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December 31, 2008 January 15, 2009 $ 0.083
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January 30, 2009 February 16, 2009 $ 0.083
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February 27, 2009 March 16, 2009 $ 0.083
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March 31, 2009 April 15, 2009 $ 0.083
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April 30, 2009 May 15, 2009 $ 0.083
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May 29, 2009 June 15, 2009 $ 0.06
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June 30, 2009 July 15, 2009 $ 0.06
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July 31, 2009 August 17, 2009 $ 0.06
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August 31, 2009 September 15, 2009 $ 0.06
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September 30, 2009 October 15, 2009 $ 0.06
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October 30, 2009 November 16, 2009 $ 0.06
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November 30, 2009 December 15, 2009 $ 0.06
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Total Regular Monthly 2009 Distributions $ 0.835
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(2) Special Distribution
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December 31, 2008 February 16, 2009 $ 0.60
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Total 2009 Distributions $ 1.435
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(1) Regular Monthly Distributions

In consultation with the Trust's U.S. tax advisors, Avenir Trust believes for US Federal income tax purposes, that the units of Avenir Trust more likely than not will be properly classified as equity in a corporation, rather than debt, and that dividends paid to its individual US Unitholders will more likely than not be qualified dividends. As such, the portion of the distributions made during 2009 that are considered dividends should qualify for the reduced rate of tax applicable to certain capital gains.

The portion of the trust distributions that is considered a dividend for US Federal income tax purposes is determined based upon the greater of Avenir Trust's current or accumulated earnings & profits ("E&P") as determined in accordance with US Federal income tax principles.

Therefore, with respect to cash distributions paid in 2009 to US individual Unitholders, we believe that 100% should be reported as "qualified dividends" and 0% should be reported as return of capital.

(2) Special Distribution

As mentioned in our press release last year at this time, for US tax purposes, the special distribution paid in February 2009 for Unitholders of record on December 31, 2008, is taxable for the 2009 year (versus Canadian Unitholders who were subject to tax on the Special Distribution in 2008). As with the regular monthly distributions, we believe that 100% of this Special Distribution should be reported as "qualified dividends" and 0% should be reported as return of capital.

Avenir has not received an IRS letter ruling or a formal tax opinion from its tax advisors on these matters. U.S. unitholders should consult with their individual tax advisors.

Avenir Trust is an income trust designed to provide sustainable distributions and growth from a diverse portfolio of operating assets. The resulting cash flow from these assets is distributed to unit holders on a monthly basis. The trust units of Avenir Trust trade on the TSX under the symbol AVF.UN. For further information on the Trust please go to our website at: www.avenirtrust.com.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction. The securities offered have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold in the United States except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws.

Forward Looking Statements

Certain information regarding Avenir Diversified Income Trust set forth in this document, including management's assessment of the Trust's future plans and operations contains forward looking statements that involve substantial known and unknown risks and uncertainties. These forward looking statements are subject to numerous risks and uncertainties, some of which are beyond the Trust's and management's control, including but not limited to, the impact of general economic conditions, industry conditions, fluctuation of commodity prices, fluctuation of foreign exchange rates, imperfection of reserve estimates, environmental risks, industry competition, availability of qualified personnel and management, stock market volatility, timely and cost effective access to sufficient capital from internal and external sources. The Trust's actual results, performance or achievement could differ materially from those expressed in or implied by, these forward looking statements and accordingly, no assurance can be given that any of the events anticipated to occur or transpire from the forward looking statements will provide what, if any benefits to the Trust.

The TSX Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Avenir Diversified Income Trust
    William M. Gallacher
    President and CEO
    (403) 237-9949
    (403) 237-0903 (FAX)
    or
    Avenir Diversified Income Trust
    Gary H. Dundas
    Vice-President, Finance and CFO
    (403) 237-9949
    (403) 237-0903 (FAX)
    or
    Avenir Diversified Income Trust
    Suite 300, 808 - 1st Street S.W.
    Calgary, Alberta T2P 1M9
    www.avenirtrust.com