Canexus Income Fund

Canexus Income Fund

April 02, 2007 16:43 ET

Canexus Income Fund Provides U.S. Tax Information

CALGARY, ALBERTA--(CCNMatthews - April 2, 2007) - The following information is being provided to assist U.S. individual unitholders in reporting distributions received from Canexus Income Fund ("the Fund") (TSX:CUS.UN) during 2006.

This summary is of a general nature only and is not intended to be legal or tax advice to any particular unitholder or potential unitholder. Unitholders or potential unitholders should consult their own legal and tax advisors as to their particular tax consequences of holding Fund units.

Canexus Income Fund 2006 U.S. Income Tax Information

After consultation with its U.S. tax advisors, the Fund believes that for U.S. federal income tax purposes, the Fund units will more likely than not be properly classified as equity in a corporation, rather than debt, and that dividends paid to individual U.S. unitholders will more likely than not 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.

The Fund has not received an IRS letter ruling or a tax opinion from its tax advisors on these matters.

With respect to cash distributions paid during 2006 to U.S. individuals, 100 percent should be reported as "qualified dividends".

Investors should report their dividend income and capital gain (if any), and make adjustments to their tax basis in the Fund units, in accordance with this information and subject to advice from their tax advisors. U.S. individual unitholders who hold their Fund 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. The Fund 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.

No impact on previous Canadian tax information

Canadian resident taxpayers should note that the above information has no impact on the previously disclosed Canadian tax information.

About Canexus

Canexus produces sodium chlorate and chlor-alkali products largely for the pulp and paper and water treatment industries. Canexus' five plants in Canada and one plant in Brazil are reliable, low-cost, strategically located facilities that capitalize on competitive electricity costs and transportation infrastructure to minimize production and delivery costs. Canexus targets opportunities to maximize unitholder returns and delivers high-quality products to its customers. Canexus is listed on the Toronto Stock Exchange under the symbol CUS.UN. More information about Canexus is available at

Contact Information

  • Canexus Limited
    Gary Kubera
    President and CEO
    (403) 571-7300
    Canexus Limited
    Richard McLellan
    (403) 571-7300
    Canexus Limited
    Catherine Fox
    Director, Taxation
    (403) 571-7300