Bonavista Energy Trust

Bonavista Energy Trust

March 07, 2005 10:30 ET

Bonavista Energy Trust 2004 Income Tax Information


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: BONAVISTA ENERGY TRUST

TSX SYMBOL: BNP.UN

MARCH 7, 2005 - 10:30 ET

Bonavista Energy Trust 2004 Income Tax Information

CALGARY, ALBERTA--(CCNMatthews - March 7, 2005) - Bonavista Energy Trust
(TSX:BNP.UN) ("Bonavista"):

Bonavista Energy Trust 2004 Canadian Income Tax Information

Bonavista Energy Trust (TSX:BNP.UN) ("Bonavista") announces that of the
distributions of $3.075 per unit paid or payable to unitholders for the
year ended December 31, 2004, 2% or $0.0615 per unit is considered
tax-deferred as a reduction to the adjusted cost base ("ACB") of the
units for Canadian tax purposes and 98% or $3.0135 per unit is taxable
as "Other Income" in accordance with the table set out below:



------------------------------------------------------------------------
Taxable Amount Tax Deferred Amount
Distribution (Other Income) (Reduction of ACB)
Record Date ($/Unit) ($/Unit) ($/Unit)
------------------------------------------------------------------------
January 31, 2004 $ 0.250 $ 0.2450 $ 0.0050
February 29, 2004 0.250 0.2450 0.0050
March 31, 2004 0.250 0.2450 0.0050
April 30, 2004 0.250 0.2450 0.0050
May 31, 2004 0.250 0.2450 0.0050
June 30, 2004 0.250 0.2450 0.0050
July 31, 2004 0.250 0.2450 0.0050
August 31, 2004 0.250 0.2450 0.0050
September 30, 2004 0.250 0.2450 0.0050
October 31, 2004 0.275 0.2695 0.0055
November 30, 2004 0.275 0.2695 0.0055
December 31, 2004 0.275 0.2695 0.0055
------------------------------------------------------------------------
Total $ 3.075 $ 3.0135 $ 0.0615
------------------------------------------------------------------------
------------------------------------------------------------------------


The following information is provided to assist Canadian unitholders of
Bonavista ("Unitholders") in the preparation of their 2004 Income Tax
Return and is not to be considered income tax advice to any particular
individual but rather, general information.

Bonavista Trust Units ("Trust Units") held outside of a Registered Plan

Canadian Unitholders who receive distributions for the year ended
December 31, 2004 outside of an RRSP, RRIF, DPSP or RESP will receive a
T3 Supplementary Slip from their investment advisor or other
intermediary. Canadian registered Unitholders who hold their Units
outside of a registered plan will receive a T3 Supplementary Slip from
Valiant Trust Company.

Unitholders must report the taxable portion of 2004 distributions in Box
26 of their T3 Supplementary Slip as "Other Income" on their 2004 T1
Income Tax Return.

For the remaining tax-deferred portion, Unitholders are required to
reduce the ACB of their Trust Units. This tax deferred portion is not
reported on the T3 Supplementary Slip and must be calculated by the
Unitholder. Unitholders should maintain a record of all distributions
that are classified as partially or entirely a tax-deferred distribution
while holding Trust Units.

The deadline for mailing all T3 Supplementary Information Slips to
Unitholders as required by Canada Revenue Agency is March 31, 2005.

Bonavista Trust Units held within a Registered Plan

Bonavista Trust Units are qualified investments for registered plans
such as RRSP, RRIF, DPSP and RESPs. Unitholders who hold their Trust
Units in a registered plan do not need to report any income related to
distributions on their 2004 income tax return.

Non-Resident Unitholders

Unitholders not residing in Canada are encouraged to seek advice from a
qualified advisor in their country of residence to obtain guidance on
the appropriate income tax treatment of their distributions.

Bonavista Energy Trust 2004 U.S. Income Tax Information

The following information is being provided to assist U.S. individual
unitholders of Bonavista in reporting distributions received from
Bonavista for the year ended December 31, 2004 on their Internal Revenue
Service ("IRS") Form 1040 - U.S. Individual Income Tax Return ("Form
1040") for 2004.

Bonavista has not obtained a legal or tax opinion, nor has it requested
a ruling from the IRS, on these matters.

Bonavista Energy Trust Units held outside of a Qualified Retirement Plan

Distributions relating to 2004 should be treated as 100% taxable as
dividends to holders of Trust Units for U.S. federal income tax
purposes. After consulting with its tax advisors, Bonavista believes
that its distributions should be considered "Qualified Dividends" under
the Jobs and Growth Tax Relief Reconciliation Act of 2003 and therefore
eligible for the reduced U.S. dividend tax rate. However, the individual
taxpayer's situation must be considered before making this
determination. Qualified Dividends are reported on Line 9(b) of the IRS
Form 1040, unless the facts of the U.S. individual holders of Trust
Units determines otherwise. Page 20 of the IRS 2004 Form 1040
instruction booklet provides examples of individual situations where the
distributions would not be "Qualified Dividends". Where the
distributions are not considered "Qualified Dividends" due to an
individual's situation, the amount should be reported on Schedule B,
Part II - Ordinary Dividends and Line 9 (a) of your IRS Form 1040.

For the non-taxable portion of distributions ("Non-Taxable Return of
Capital"), if any, a taxpayer must reduce the cost (or other basis) by
the amount of non-taxable distributions in calculating the gain or loss
on sale of Trust Units. If the amount of "Non-Taxable Return of Capital"
exceeds your cost (or other basis), report the excess as a capital gain.

U.S. holders of Trust Units are encouraged to utilize the Qualified
Dividends and Capital Gain Tax Worksheet provided by the IRS to
determine the amount of tax applicable.

Canadian withholding taxes that have been withheld from the taxable
portion of your distributions (as computed under Canadian tax
principles) should be reported on Form 1116 "Foreign Tax Credit
(Individual, Estate or Trust)". Amounts overwithheld should be claimed
as refund from the Canadian Revenue Agency and should not be claimed as
a credit against your U.S. federal income tax liability. Information
regarding the amount of Canadian tax withheld relating to 2004
distributions should be available through your investment advisor or
other intermediary and is not available from Bonavista.

Bonavista Energy Trust Units held within a Qualified Retirement Plan

There should be no amount that is required to be reported as income on
Form 1040 where the Trust Units are held in a Qualified Retirement Plan.

The information in this release is not meant to be an exhaustive
discussion of all possible income tax considerations, but a general
guideline and is not intended to be legal or tax advice to any
particular holder or potential holder of the Trust Units. Holders or
potential holders of the Trust Units should consult their own tax
advisors as to their particular tax consequences of holding the Trust
Units.

Bonavista is a natural gas weighted energy trust which is committed to
maintaining its emphasis on operating high quality oil and natural gas
properties, delivering consistent distributions to unitholders and
ensuring financial strength and sustainability.

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Bonavista Energy Trust
    Mr. Greg Warner
    Vice President, Finance
    (403) 514-7307
    (403) 262-5184 (FAX)
    Website: www.bonavistaenergy.com